Could cab companies beat Uber at its own game?

App-based ridesharing is forcing taxi services to innovate, whether they like it or not.

It's a common theme playing out in cities throughout the United States: app-based car services, most notably Uber and Lyft, offer their services in a city and the local taxi operators and the cities themselves file lawsuits against the companies. It first happened in 2010 when Uber received a cease and desist letter  from the San Francisco Municipal Transportation Agency (it later agreed to an operating agreement with regulators). And four years later, as the services are expanding, the companies face lawsuits in cities from  Houston, Texas to Columbus, Ohio to Seattle, Washington.

But a taxi company in Pittsburgh has decided to take a different path in the battle against Uber and Lyft: imitation. 

Yellow Cab Co. in Pittsburgh is seeking approval from the Pennsylvania Public Utilities Commission to run an app-based ridesharing service that allows people to pick up customers using their own cars. 

As Yellow Cab president Jamie Campolongo told The Pittsburgh Tribune-Review: "There's a difference. We're not critical of competition. I don't care if Lyft and Uber operate. They just need to follow the rules of the PUC and be responsible. Did we take a page out of their book? Sure we did, but they pirated our industry. We'll step into their shoes and do it right."

Strong words. The Tribune-Review explains that Campolongo doesn't think new ridesharing apps are playing by the rules because they haven't received approval from the state Public Utilities Commission. 

One difference between apps like Uber and Lyft and the cab company's app is that the new ridesharing app will only operate during high-demand times, but other than that, as Campolongo freely admits, they're pretty much just lifting the ridesharing business model. 

Can it really do that? At this point, yes. There is little that's proprietary about the business model. Since 2000, only one patent has been granted to a ridesharing company and that was to Sidecar in 2000. Uber has applied for 11 patents, but they are pending. As more taxi companies will likely follow the lead of Yellow Cab in Pittsburgh and update their fleet -- especially if the laws and regulators side with the relatively new companies --- ridesharing apps will have to rely on their brands to keep them successful in the space.

Whether or not ridesharing apps continue to win their legal battles, it's clear that they are shaking up the taxi industry, and not just in Pittsburgh. In Washington, D.C. -- where D.C. city council passed legislation to allow ridesharing services two years ago -- the city's taxi fleet has finally been equipped with credit card readers. The fleet is also considering Uber's "surge pricing" model that increases prices during high-demand times.

As one taxi driver who switched to Uber told Bloomberg Businessweek. "No one under the age of 40 with a smartphone is going out and getting a cab anymore. I say if you can’t beat ’em, join ’em."

Cab companies will have to start doing the same. Because, even if it's able to keep Uber and Lyft out of their cities, the word is out, there's a better way.

Photo: Flickr/

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