Taxis Battle Uber, Lyft For New Year's Eve Riders

There's a battle for riders in San Francisco between the taxi industry and ride-service companies like Uber and Lyft, and it's heating up in time for New Year's Eve,  expected to be one of the busiest nights of the year for the warring vehicle-for-hire industries.

Over the last few years, a growing number of people are choosing ride-service companies over taxis. A report from San Francisco taxi officials this fall showed taxi rides in the city are down by more than 60 percent over the last year, and many taxi drivers blame ride-service companies for the decline.

Uber and Lyft are expected to charge higher-than-normal prices New Year's Eve as part of a practice called surge pricing, when passengers can pay several times the amount of a usual ride when demand outstrips supply. The ride services say this encourages extra drivers to hit the streets. In fact, Uber announced on Tuesday that an average ride at 2 a.m. could be more than $100.

People don't always like the final cost of an Uber ride incurred during surge pricing. This New Year's Eve, taxis are hoping to grab those disgruntled customers with discounted or free rides. Flywheel, an app for hailing taxis, is offering a $10 flat rate for rides booked on the app between 8 p.m. and 3 a.m. Rides more than $50 will be charged the metered balance.

Flywheel CFO Oneal Bhambani calls his app a bet on the taxi industry.

"People will come back to Flywheel not for the $10 rides, they'll come back to Flywheel: a) because it's safe, b) it's always there, at 5 p.m. when you're coming home from work it's available, it's availabe during times of low demand and it's available at a predictable price," Bhambani says.

Jim Gillespie is the president and general manager of Yellow Cab, one of the largest taxi companies in San Francisco. He says hundreds of his drivers use Flywheel.

"I think it's a great move just to go to the public and say surge pricing isn't a necessity, and we're here to serve the public without gouging them."

Gillespie also says companies like his need to change to keep up with Uber and Lyft, so he's focusing more on customer service.

"We have a project where we've been doing things to do extra service to maintain our taxis, whether it be through cleaning them, replacing the seats, (the) kind of stuff that we've always done. But we've really stepped it up to make sure that we're providing a good product to the riding public."

He also says they're working to improve service to the outer edges of the city, although he says the bigger problem with that is too few taxis on the road, a common complaint among cab companies, which make their money from renting cabs to drivers.

An even better deal for some cab passengers:  Luxor is offering free rides anywhere within San Francisco on New Year's Eve courtesy of a personal injury firm, as long as the ride is booked through its dispatcher and you are picked  up from a restaurant, hotel or bar downtown. Luxor's dispatch number is (415) 282-4141.

Both Uber and Lyft will donate a percentage of their New Year's Eve profits to Mothers Against Drunk Driving.