As Uber Becomes a Publisher, Boston Taxi Trade Paper Stops Printing
Uber isn’t just changing the way taxi and black-car companies operate.
As the multibillion-dollar car-for-hire juggernaut expands across the country, businesses that serve the old-school, heavily regulated taxi industry are suddenly feeling the effects of new competition.
A prime example is Carriage News, a 45-year-old trade paper focusing on the taxi industry around Boston.
Late last month, publisher Bob Keeley announced in a front-page story that the February issue would be the final print version of Carriage News, and that its columns and dispatches about the industry would soon move to a revamped website.
Publishers of all sizes have faced fates similar to Carriage News as the Web has continued to siphon advertising money away from the once-lucrative print industry.
But Carriage News said the recent collapse of advertising from its client base is more clearly tied to the falling value of the traditional cab business, which is grappling with competition from digital-first companies like Uber and Lyft after decades of very limited competition in many urban markets.
“Over the years, one major source of advertising revenues for Carriage News has been the financial community—the banks, credit unions and other financial institutions that provided much-needed financing for buyers of taxi medallions,” the paper said in its final print edition.
But with the rise of Uber, which entered the Boston market in 2012, the value of each of the 1,825 city permits for taxis (known as medallions) has started to erode. The going price has dropped from about $700,000 to around $500,000 in just a year, the publication wrote, and could be headed much lower.
“The lending institutions are not lending any longer,” Carriage News wrote. “Nor are they advertising.”
Coincidentally, the demise of a printed Carriage News comes just as Uber is getting into the print world itself.
This week, the San Francisco-based company introduced Momentum, a glossy magazine aimed at communicating with its drivers in several markets, including Boston. The first issue of Momentum didn’t carry any advertising, which isn’t surprising for a company that has raised nearly $5 billion in private investment in its short lifetime.
The final print edition of Carriage News is filled with plenty of disdain for the rise of Uber and other smartphone-based car-hailing companies, lamenting the quick damage that this new kind of competition has done to a once relatively stable industry and the reluctance of local regulators to stop such change.
Similar complaints have been consistently lodged by established cab companies around the country. Uber and its supporters, however, point to the fact that consumers appear to be quite happy with a next-generation alternative to old-school cabs and livery cars, which often generated their own complaints over payment hassles, inconsistently maintained vehicles, and navigation problems.
The popularity of Uber has been reflected in the reluctance of politicians to clamp down on what is, in many markets, a technically illegal service when it first debuts.
Cities in the U.S. tend to strictly regulate the supply of cars for hire and the rates they may charge, a setup that keeps prices and earnings stable but also freezes out new competitors. By using smartphones to connect riders and drivers, Uber and its major competitor, Lyft, have been able to quickly set up shop in new markets while simultaneously arguing that they are a new kind of company that doesn’t fit into old regulations, and shouldn’t necessarily be bound by them.
Boston-area taxi owners have not had much luck trying to get government officials to slow the growth of Uber and similar services. Taxi owners recently sued the city and state in federal court, arguing that the government’s failure to strictly enforce laws limiting the car-for-hire market had unfairly reduced the value of their taxi medallions.
It appears those arguments could have an uphill battle ahead of them. In early February, a federal judge declined to issue an emergency order forcing tougher regulation of Uber and similar services, saying that taxi owners might not be able to prove their claims at trial.
“The public interest is best served by the existence of a diverse and competitive market for transportation services, including both traditional taxicabs and TNCs,” Judge Nathaniel M. Gorton wrote, referring to the acronym for “Transportation Network Companies” such as Uber.
The Boston cab owners’ lawsuit is just one of several cases tied to Uber’s fast-growing business. One of the most serious of those cases seeks to have Uber drivers recognized as full-fledged employees rather than independent contractors. Uber is resisting those claims, saying it does not act like a traditional employer in several key ways, including the fact that it doesn’t closely manage drivers’ working hours.
The print edition of Carriage News is certainly a throwback to the pre-Web era of local trade publications, with columns from local regulators, industry figures, and service providers alongside staff-produced content. A one-year print subscription was $24, payable by check or PayPal.
The parade of advertisers in its pages touched on just about any place a cab driver or owner might want to spend money: lawyers specializing in their industry, car dealers who sell models typically used as cabs, auto-glass repair companies, insurers, car washes, and bargain gas stations that tout “50 Hoses—No Waiting.”
But, in the end, they weren’t enough to continue covering the costs of printing and mailing a physical newsletter. In an e-mail, Keeley predicted that things may have changed irrevocably in this formerly closed-off, highly local industry.
“Carriage News is the first victim to fall at the hands of Uber, et al,” he said. “I am sure it will not be the last.”