What a Stinky Dog Can Teach You About BusinessBlog of Good ImprovementsBusiness travelers have been going online for a decade to book airline tickets, hotel rooms and rental cars. But until recently they still had to hail a cab the old-fashioned way
Now, 34-year-old New York cab driver and entrepreneur Jason Diaz is trying to change that. Six months ago, he launched 1-800-cab-ride.com in hope of using the Internet to create a national brand and sales organization for the highly decentralized taxicab business.
"I want to do for the taxi business what 1-800-flowers.com did for the flower delivery business," Diaz says.
Americans spend more than $12 billion a year on taxi rides, Diaz says, which makes the taxi business about as large as the ice cream industry. And taxis carry more customers each year than do all the rental car companies combined. "But there's no Dreyers or Breyers, and no Hertz or Avis or Enterprise. There are no big name brands. It's all mom and pop."
Backed by private investors — he won't say who, or how much they've invested — Diaz created 1-800-cab-ride.com by enlisting locally owned cab companies from around the USA into a network that extends to about 40 major markets. He's adding about five markets a month.
Currently, only about 300 people a day book taxi rides through the service, Diaz says. But he is expecting rapid growth.
Flat fee charged
Travelers can schedule a cab ride with as little as 10 minutes advance notice, though the company guarantees only that a cab will be available within three hours of booking. Travel agents can also book cab rides online for their clients at the same time they book airline tickets and hotel rooms.
The company quotes a flat fee at the time a trip is booked. It includes fare, tip, taxes and tolls. The customer must pay with a credit card at the time of booking. That reduces the need for business travelers to carry cash and improves the accuracy of corporate expense reporting.
It also eliminates the possibility that a dishonest driver will sell the customer's credit card number.
Another selling point for business travelers: If anything goes wrong for customers — a laptop left behind, for example — the company can pinpoint their cab quickly.
Diaz sells the service to local cab companies by highlighting the potential for greater productivity and increased revenue. He says 60% of drivers' time is spent "doing nothing but waiting for the next ride, just hanging out."
Local operators keep most of the fare and pay 1-800-cab-ride.com fees for sending them business. In competitive big-city cab markets, the fares represent money the cab companies wouldn't otherwise get.
"It's well worth it to them to share a part of that incremental revenue with us," Diaz says.
Rick Hewatt, owner of Checker Cab of Atlanta, which has been in business for 60 years, signed up because he saw Diaz's proposition as "an opportunity to bring us additional sales and to get us into the world of online reservations."
James Hickey, senior director of marketing and sales at Chicago's Flash Cab and 303 Taxi in the suburban Chicago area, calls 1-800-cab-ride.com a "really great idea."
"I've heard many, many horror stories of people who've had bad experiences with cabs when they've gone to other cities," he says. Diaz's plan assures travelers a clean, safe cab with protection against overcharging, he says.
Brian Deely, a financial planning associate from Tacoma, Wash., says he's sold on the concept after one use last month in Houston. "I found it online very quickly," he says, "and the really cool thing about it was that I paid right then and there."
He's planning to use the service again on a trip to Las Vegas, and expects to use it on trips elsewhere. "It sure beats having to scramble for transportation after I land," Deely says.
Still drives occasional shift
For Diaz, his venture is the combination of two loves: big business and taxis. He first got interested in the cab business during his college days at the University of Pennsylvania's Wharton School, where he earned a bachelors degree in 1995.
After graduation, Diaz landed a job as a management consultant in New York.
Motivated by the murder of a friend in a street crime, Diaz threw himself into the creation of a crime-watch-on-wheels called Cab Watch. The non-profit trains cabbies to look for and report crime.
Along the way Diaz got his hack's license and still occasionally pulls a shift behind the wheel. Eventually he left his consulting job to focus on his taxi business interests, which includes TaxiPass. That company allows local customers to buy taxi credits from ATM-style machines.
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