by James A. Bacon
The Richmond metropolitan area has a modest but growing taxi fleet. The Henrico County Police Division, which manages the bulk of taxi regulation in the region, issued 834 tax permits last year. Unlike some cities, which restrict the issuance of taxi permits — in New York City, taxi medallions can cost upwards of $1 million — all it takes to operate a taxi in the Richmond region is a background check, an easily obtainable certificate of need and a vehicle that meets code — a process that costs about $40.
Richmond’s taxi business is about as laissez-faire as you can find anywhere in the country. So, it’s not a surprise that the industry has seen the rise of a company like Napoleon Taxi. Starting six years ago as a one-man taxi company, Jonathan Trainum has expanded his enterprise to a 32-car fleet and 90 drivers. As Style Weekly tells the story, he’s investing in technology and he’s bracing to do battle with Silicon Valley ride-sharing company Uber, which has begun sniffing around the Richmond market.
Trainum started his taxicab career working for a Southside taxi company but chafed at the dispatchers’ blatant favoritism toward certain drivers and the reprimands he received for making sure customers made it into their homes after a ride. He also disapproved of the way dispatchers routinely ignored calls from public housing projects. Trainum thought he could do better. Fortunately, local taxi regulations posed few barriers to entry.
The business generates about $2 million a year today. Profit margins are tight but Trainum is investing in technology. Style describes his dispatch center this way:
Seven screens display a map of the city, showing where calls are coming in, and where 32 cabs are at any given moment. The origin and destination of every trip from every caller has been stored to help speed things up.
On Friday, [taxicab driver Tom] Berck never needs to scan the sidewalks hoping to find a fare. Instead, a tablet hooked to his dash has him moving constantly between 7 p.m. and 3 a.m., crossing the city again and again while he accepted fares as far out as Midlothian and as close as the two-minute drive between Mosaic off River Road and the University of Richmond.
Trainum also has been building an Uber-like app that hopes to roll out this fall. He knows Uber is coming, and he’s determined to beat the company at its own game. He hopes the combination of real-time tracking and a willingness to take cash, which Uber doesn’t, will deflect the threat.
“You’re telling people the only way you can get a cab is through a smartphone app with a credit card,” Trainum says. “[Uber's] customers fit that niche. We want to take the technology they’re using [and] open it up where we can provide service for everybody.” Trainum says he’ll make his technology available to any Richmond can company willing to use it.
“The next five years for Napoleon is us trying to counteract complacency in our industry,” Trainum says, “which has been exposed by Uber and Lyft.”
Bacon’s bottom line: This is the way the taxicab industry should work. Low barriers to entry make it easier for hard-chargers like Jonathan Trainum to break into the industry with a better business model. Minimalist regulations also make it difficult for local taxicab companies to block Uber from of the market. The only way to survive is to innovate, and that’s exactly what Trainum is doing. At the end of the day, Richmonders will have a superior taxi (or taxi-like) service than they had before.