Lyft for riders is a downer for SF taxis

Nick Riggal climbs into a car adorned with a pink moustache after requesting a ride using the Lyft car service in San Francisco, Calif. on Wednesday, Sept. 5, 2012. Nick Riggal climbs into a car adorned with a pink moustache after requesting a ride using the Lyft car service in San Francisco, Calif. on Wednesday, Sept. 5, 2012. Photo: Paul Chinn, The Chronicle Photo: Paul Chinn, The Chronicle Image 1 of / 7 Caption Close Lyft for riders is a downer for SF taxis 1 / 7 Back to Gallery

(09-14) 10:37 PDT San Francisco -- The taxi business in San Francisco is famously fractious.

"It's like a car crash - you can't look away," says Hansu Kim, owner of DeSoto Cab Co.

Drivers and cab companies bicker, freelance town cars poach fares, and there are not enough cabs on the street.

That's how it is has been for years, which is why it's been easy for some savvy startups to jump into the market.

They've invented smartphone apps that combine ride sharing, social media and (in one case) pink mustaches to capture a trendy new way to get around town. Suddenly, a taxi looks old, dated and sadly unhip.

Ed Reiskin, director of the San Francisco Transportation Agency, which regulates how many cabs can operate in the city, says he could see this coming.

"We have created this void that many others have filled."

Paying with credit

The startups - SideCar, Lyft, Uberand RelayRides - let riders pay with a preloaded credit, request a ride with a click of a smartphone and track it in real time on a Google map.

It's far more efficient than calling a switchboard, talking to a surly dispatcher and standing on the corner at 2 a.m. wondering whether a cab would show up.

"We are offering a more enjoyable alternative," said John Zimmer, co-founder of Lyft, which uses cars with pink mustaches. "We offer a marginally less-expensive experience with extreme convenience and personality experience."

The popularity of these companies is forcing taxi folks to realize they need to make changes.

"The industry is spoiled," said Kim. "Many of the ills have been self-inflicted."

That's not to say Reiskin or Kim approve of the newcomers. There are some real concerns. Lyft, for example, lets drivers use their own cars. They aren't technically taxis because the service only suggests a "donation."

"In one sense, you can't blame the market," says Reiskin. "But with services like SideCar and Lyft, you are talking about being completely unregulated. Things like insurance and background checks are completely absent."

(Zimmer says it will announce soon that its cars will have a $1 million excess insurance policy. His company, like others, also says it checks criminal and driving records.)

Enforcing regulations may concern the industry, but the smartphone generation is probably more interested in a quick trip to the parking-challenged Mission District.

A photographer and I tested Lyft. The app located us and said two drivers were five minutes away. A photo of our driver Shelby Stone, and her car, a black VW, popped up on the screen.

When she arrived, we got in and exchanged a fist bump (a Lyft ritual). Ten minutes later, when she dropped us off at a cafe, a note appeared on my phone saying the suggested donation was $11 and that I could add a tip and a rating of the driver if I wished. I did, and by the time I got back to my desk, an e-mail receipt had already arrived.

Pretty slick.

Getting the message

Unless cabs in the city get with the program, it is easy to see these "rogue cabs" putting a big dent in their business.

Cab owners swear they get the message. They're adding credit card readers in the backseats, dispatching cabs by GPS and even nudging cabbies to be more cheerful with passengers. Meanwhile, the city is adding 150 to 200 medallions for more cabs - despite screams of dismay from drivers.

"We need to modernize the system," Reiskin said. "Increase the number of taxis and make sure that when you call a cab, you get one."

Otherwise, the future looks pretty clear.

"If we are not going to enforce this, we are going to deregulate the system," Kim said. "Everyone is going to open an on-demand service."

Better hurry. A lot of them already have. And it's working.