Houston's taxi supply will stay with the status quo for at least another six months, as city officials and paid ride companies assess what's next for an industry inundated by app-based competitors such as Uber and Lyft.

City Council on Wednesday is scheduled to approve a plan delaying issuance of additional taxi permits until March 1. The delay was sought by regulators, cab drivers and the two companies that possess about seven out of every 10 taxi permits in Houston.

"Due to the flux in the market and impact of (transportation network companies), the administration and council has listened to the industry and determined this is not the best time," said Cindy Clifford, spokeswoman for Houston Yellow Cab, the city's largest taxi firm.

Permit headaches

Drivers, meanwhile, said they would like a new way of distributing permits, which could leave them as independent operators as opposed to the companies holding most of the permits.

"Many drivers are more qualified and capable to manage the industry than many company owners that are struggling to innovate and adapt to new realities," Raymond Ito, president of the Houston Taxi Drivers Association, wrote in a letter to city officials asking for a delay in the permit process.

Though there are 2,500 taxi permits, there are between 8,000 and 9,000 licensed drivers in the city, which can fluctuate seasonally. Drivers pay about $100 weekly for access to a permit from the companies, down from around $146 prior to Uber and Lyft entering the market.

In the letter, Ito also notes that companies are "flush with unused permits."

According to Houston's Administration and Regulatory Affairs Department, there are unused permits. In its report to staff, the department also noted the state rules - which were vigorously opposed by the city - have led "permittees to assess their own investment in the industry."

Calculations skewed

Typically, the permits are released in September, using a formula that takes three years' worth of taxi use data, population gains and airport trips to calculate how many cabs are needed to meet anticipated demand while not over-saturating the market.

The validity of the calculation, however, has been upended by Uber and similar companies that connect interested riders and willing drivers via smartphone app. The companies set up in Houston in 2014, leading to a sometimes bitter fight for new city regulations.

After Houston enacted rules the companies found onerous, they sought and received state regulations this year to trump Texas cities.

Their arrival and the recent change to the paid ride rules has wreaked havoc on attempts to gauge demand. Though Uber and Lyft closely guard their information, city officials have said there is no doubt they have had a huge impact on the taxi market, something the industry predicted when the city changed its rules.

In 2014, the Administration and Regulatory Affairs Department determined Houston could support 205 taxi permits, in addition to the 2,480 permits issued at the time. Sensing upheaval, when the time came to issue the permits in 2015, the city opted to delay.

Instead, only 25 permits were issued as part of a pilot to allow cab drivers to form their own smaller taxi company.

Allowing a smaller driver-led company entry is among a number of changes to the commonly slow-moving paid ride market since Uber and Lyft landed in the area.

The city made changes to the ordinance covering paid rides and also banded with the taxi firms for a universal cab-hailing smartphone app, aimed at making it easier for visitors to get around during the Super Bowl.

Meanwhile, many drivers have switched sides, opting to stop driving cabs and start driving for Uber and Lyft.

Those full-time drivers are joined by thousands of others driving part-time for the companies, which no longer have to deliver any routine information about trips or the number of drivers to city officials.

With a portion of the industry essentially de-regulated by the state - which will not have a system for licensing Uber and Lyft until later this year - city officials said they are monitoring the situation but have not decided whether more changes to local ordinances are needed.

Wait-and-see attitude

Taxi company officials, meanwhile, are not asking for any changes at this time.

"There will probably be a change," Clifford said. "It is still too early to determine what that will be."

Until changes are made, the app-based companies and taxicabs have different rules of the road.

"Whatever the regulations are for one is, they should be for the other," said Richard Briesch, a professor of marketing at Southern Methodist University's Cox School of Business, who has researched the paid ride industry.

The challenge, Briesch added, is that under current regulations, companies such as Uber and Lyft cater only to those with credit cards and smart phones, without responsibility for serving low-income riders.

"Cities look at taxi companies as an extension of public transportation, and they don't look at Uber the same," he said. "I don't want to be their advocate, but I do feel sorry for them. … The city needs to find a way to help fund the cab companies that are providing this extension of public transportation."

The alternative might be to find many of those people another ride.

"If they don't find a way to fund taxi companies, it is my belief they will go out of business," Briesch said.