Thoughts on Flywheel/Desoto

Desoto is changing its name to Flywheel and within two months the old blue & white Desotos will all look like the above pic. The first cabs are already on the street.

Flashier, no?

Brilliant, yes!

The new color scheme acts as an advertisement for the app and the app is advertisement for the company.

However, a bit of confusion and hostility surrounds the change.

First the Confusion

Drivers at other companies who use the Flywheel app are apparently worried about losing rides. They shouldn't be.

Part of the agreement between Flywheel management and Desoto Owner Hansu Kim is that that orders will continue to be dispatched in the same way that they always have – the ride goes to the closest cab regardless of company.

What Desoto is counting on, according to part owner Matt Gonzales, is an "upsurge of advertising" that will cut into the TNC's market share and hopefully spread the wealth to everyone.

There some evidence that this is already happening. According to former Flywheel manager Sachin Kansel, the number of Flywheel orders has gone up six times over the last year. 

Flywheel also has recently picked up several investors and a new CEO Rakesh Mathur who intends to use the money to advertise and expand the Flywheel brand across the country.

In addition, former Uber and Lyft customers are coming back to Flywheel because the TNC drivers are generally inept and don't know where they are going. The refusal of Uber and Lyft to fingerprint their applicants or train their drivers guarantees a continued flow of thugs and incompetents into the future. 

As Flywheel becomes a more widely known brand we'll be getting more and more riders back – plus new riders who can now get cabs because of Flywheel in neighborhoods where they couldn't before.

In addition, Hansu Kim says that Flywheel is working on a new version of the app that will do things that Uber and Lyft apps can't. A current example of that is the ability to make advance airport reservations.

Now the Hostility

Luxor and Yellow Cab companies don't like it. Well ... of course they don't. The idea is bold, innovative and creative. As the leading dinosaurs of the taxi industry, John Lazar of Luxor and Nate Dwiri of Yellow have been doing everything they can to help themselves, and the industry, become extinct.

They are the ones who killed Open Taxi Access over four years ago. As you might recall, the SFMTA had allocated $405,000 to set up a universal app in all the taxis and John Lazar reputedly went backdoor to his former school mate and then buddy, Major Ed Lee, causing the measure to mysteriously disappear from the MTA's agenda.

At the same time, Yellow was feverishly holding back radio orders so that they could petition for more cabs. Let me spell this out: They were deliberately giving bad service so that the City would give them more medallions.

When Uber et al attacked and the dinos finally realized that taxi apps were the future, instead of embracing Flywheel as the de facto universal app, Dwiri had a relative design a Yellow app (that works about as well as the old Yellow dispatching system – that is to say, badly), and Luxor continued to back Taxi Magic – a dinosaur in its own right.

Even to this day, when Yellow can't begin to fill its shifts, they still keep drivers waiting two or three hours to start work so that Yellow can extort more money in tips. That there might be a relationship between their treatment of their drivers and the dwindling numbers of same has apparently never occurred to Yellow management.

Whatever – If it hadn't been been for the geniuses at Luxor and Yellow, Uber and Lyft would never have taken the market-share that they have.

BTW – Uber came out with a "study" that saying they did $500 million in business in San Francisco last year while the taxi industry only took in $140 million. But Flywheel calls this bullshit (don't blame me for the crudeness. I don't use such words – in print.) The actual figure should be $400 million for the taxi business.

A Few Problems

One is that the Flywheel paint job does not make it clear that the taxi also takes flags and credit cards. In addition, the cabs I've looked at don't have the advertising space on top. That space could be used as part of a campaign for Flywheel/Desoto and against Uber – could be much effective than a bus because taxies go more places.

Another is that Flywheel has a website and blog that is slick and up to date but, as an advertising tool,  could be more effective.  The contrived pic in the blog makes it look a little too much like Lyft light.

There are also continuing problems with the driver support system such has holding drivers off the app for various minor reasons. I personally am not sure what all their rules concerning accepting orders and cancellations are.

Sachin Kansal and Steve Humphrey have moved on ("happily" they say – Humphrey upped his investment in Flywheel). Therefore, it seems a good time for the new management to meet with the drivers and take a look at some of the policies that might be changed, clarified or improved.

Town Hall Meetings: Final Speeches

With Matt Gonzales (standing in front of Mike Spain) making a surprise Monday appearance as a sub for Hansu Kim, the presentation of reform plans came to a close on Wednesday December 9, 2009.

Gonzales, Spain and Giuseppe Carvelli all spoke in favor of auctioning off taxicabs - though Gonzales said that he could accept fixed price sales. Their ideas are basically similar so I'll just mention a few points. Arguments in favor of auctioning cabs claim that auctions will:

• Allow older drivers to exit the business.
• Move the List or allow for a faster turnover of medallions.
• Allow drivers to build up equity.
• Allow for the possibility of making a profit off their investment.
• Give medallion holders the freedom to sell at any time.
• Raise revenue for the city.

In Spain's version, revenue would also be raised for a drivers fund.

There were two other ideas in their presentations that I found new and interesting.

Gonzales said there was no real reason why a loan for buying a medallion had to be for 15 years. It could just as easily be for 30 years like the mortgage on a home. In that way, the new medallion holders would have more money to spend on themselves than show up in some other projections. In other words if a loan only cost them $1,000 a month, they could live much better than they could if loan costed $1,800.

Spain, saying that he'd borrowed the idea from Hansu Kim, proposed a voucher system for drivers that could be used toward the purchase of a medallion at an auction. For instance if someone had been a working driver for 20 years he or she would get a voucher for $250,000. If a medallion sold for $400,000, the person would only have to come up $150,000 of his or her own money to compete.

Driver Peter Kirby, who is on the list, had a similar idea saying that drivers should be given credit or money for the time that they had spent on the list in event of an auction.

Driver Athan Rebelos introduced a plan that would create two classes of medallions: fleet medallions that would be prohibited from picking up at SFO and would be used primary for answering radio calls; and individual medallions that would operate much like medallions do now. Both classes could or would be auctioned off under various restricted conditions. The money raised from the auctions would go for taxicab regulation and enforcement, a general city fund and a medical and disability fund for cab drivers.

A great deal of thought and work went into preparation and presentation of all the various plans. I haven't had the space or time to do them justice here. You should be able to find copies of them from the Town Hall meetings archive at:

http://www.sfmta.com/cms/ctaxitownhall/ArchiveofMarchandApril2009TaxiTownHallmeetings.htm

or by contacting:

• Director of Taxis & Accessible Services
  One South Van Ness Avenue, Seventh Floor
  San Francisco, CA, 94103.
• Phone: 415.701.4400.