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Business Observer Friday, Nov. 22, 2013 4 years ago

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A retired high-ranking federal government analyst aims to shake up a niche of the transportation industry nationwide — starting in Tampa. Several challenges, from regulatory to technology, stand in his way.
by: Mark Gordon Managing Editor

The inefficiency of the premium private car service industry stunned Alan Stapleton soon after he arrived in Minneapolis for a June 2012 wedding.

The process, says Stapleton, was agony. He made at least seven phone calls, wasted two hours, and, with no method to price shop a simple hotel trip, he was still stuck at the airport. A retired federal government official-turned-entrepreneur, Stapleton decided to do something about it. Says Stapleton: “It struck me that this could be a lot better than it was.”

Stapleton says he spent the plane ride back home, to Baltimore, drawing up ideas “on the proverbial napkin” of how he could improve the private car service industry. The result is RideCommand, an Annapolis, Md.-based mobile app car service firm that made its nationwide debut in Tampa in mid-October.

The Tampa area will be the laboratory for RideCommand's patent-pending technology that utilizes a reverse bid system, where companies compete for a customer's business. “I have a model where the consumer is in charge,” says Stapleton, assistant director of the U.S Government Accountability Office at the peak of his Beltway career. “It puts you in charge of your own fleet.”

The RideCommand app and website allows users to virtually make a ride request. That request goes out to car services registered in the RideCommand system. RideCommand, so far, has agreements with about 30 Tampa-area local licensed luxury car services. Most of those are one- or two-vehicle services. Traditional metered taxi companies aren't part of the RideCommand network.

The companies in the RideCommand system bid on the customer in a reverse auction format where prices go down, not up. The passenger, finally, gets to select the winner among all the bidders. RideCommand takes a commission, up to 12% of the fare, from the firm that wins a bid.

The rationale for the reverse-bid strategy, Stapleton says, is simple: A company with a vehicle on the way back to base without passengers would rather get a low bid, and some revenue, than sit empty. At least that's what Stapleton hopes will happen. “We don't know how it will work,” Stapleton says. “It's never been done before.”

Other challenges loom for RideCommand. The firm, for one, must prove a sustainable need exists for the service that can be duplicated in other markets. “For some people it's too much technology,” says Stapleton, who invested about $250,000 of his own money into the business.

Another hurdle is regulation. That comes mainly from the Hillsborough County Public Transportation Commission, which maintains a $50 minimum fare for all premium car rides, no matter the distance. A premium car is basically a vehicle without meters. The Hillsborough PTC regulates all vehicles for hire, from taxis to tow trucks.

The $50 rule can sink RideCommand if customers balk at the minimum fee. One way RideCommand navigated the rule is a partnership with Tampa-based Cab Plus, which combines luxury sedans with a metered pay system, says owner and CEO Brook Negusei. Cab Plus, the biggest company RideCommand works with, has about 35 vehicles.

So RideCommand users can book a ride on Cab Plus sans the $50 minimum. “We are a luxury cab service,” Negusei says. “We charge a little more than a taxi, but less than a limo.”

The $50 rule nonetheless drove another car service app, San Francisco-based Uber, out of town during the Republican National Convention in August 2012. Uber departed when it deemed the $50 fee unworkable.

Stapleton is confident he can avoid that result. He hopes success in Tampa will catapult the firm to success in other markets, including Miami, Orlando, Baltimore and Philadelphia. “Tampa is a nice place to crawl before you walk,” says Stapleton, “and a nice place to walk before you run.”

Road Kill
The Hillsborough County Public Transportation Commission is on a possible road to extinction.

That could happen under new legislation proposed by State Rep. Jamie Grant, R-Tampa, and State Sen. Jeff Brandes, R-St. Petersburg. The legislators filed a bill Oct. 30 that would put the existence of the PTC up for local referendum. The Hillsborough legislative delegation would have to approve the bill first. Then it would go to Tallahassee, where both chambers and the governor would vote on it. If it passes there, local voters could decide the PTC's future.

The Florida Legislature created the PTC in 1976. Many large cities have similar commissions, designed to ensure safety in a vehicle for hire.

But in many of those cities, and now in Tampa, transportation commissions have become magnets for anti-competition criticism. The Arlington, Va.-based Institute for Justice, for example, sued the Hillsborough PTC earlier this year, a case that remains active. The institute contends the commission's $50 minimum fare rule for non-metered vehicles is an example of “burdensome regulations and restrictions not common in other places.”

The PTC has also faced criticism on other fronts. A previous executive director left under controversy over being paid when he was out sick. And former Hillsborough County Commissioner Kevin White was imprisoned for a bribery scandal that partially involved the PTC and a towing service.

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