Madison’s Tesla ride-share company shifts gears on taxi services, congesting local cab operations

Green Cab no longer operates 24/7, a change that violates Madison’s taxi ordinances.
Green leaves float down over a light brown map of Madison's taxi stands.

Green Cab no longer operates 24/7, a change that violates Madison’s taxi ordinances.

As silently as the Tesla fleet it runs, a Madison transportation company stopped operating as a taxi service this year, leading to confusion from longtime cab users and others in the city’s transportation sector.

Mobility Transformation, Inc. owns and operates a lot of transportation-adjacent businesses in Dane County. It is the current owner of transportation services Green Cab and Van Go Transit. The parent company also owns Mobile22, a logistics company focused on the transportation sector, and tech company Zerology, which operates the software and tech systems used by the environmentally-conscious ride-hailing apps in Dane County. 

Mobility Transformation bought both Green Cab and Badger Cab in 2020 to expand the city’s eco-conscious transportation footprint. Badger Cab employees soon transitioned to donning Green Cab branding and operating a mix of all-electric Chevrolet Bolts and Model 3 Teslas. This shift even gained Zerology the title of a 2020 Dane County Climate Champion, as awarded by Dane County Executive Joe Parisi. Currently, Green Cab operates roughly 30 Teslas and a handful of Bolts.

When Mobility Transformation bought Green Cab, the company invested $5 million to create the nation’s first all-Tesla taxi service, but has now switched gears on its operations.

In an internal Zerology email obtained by Tone Madison, the tech company’s Vice President of Mobility Bob Frick addressed all Green Cab drivers regarding the company’s operational changes this March.

“Effective immediately, we are no longer operating 24/7,” Frick says in the email. 

Frick told drivers that Green Cab’s hours of operation are 5 a.m. to 8 p.m., seven days a week. 

“All rides must be ordered in advance, that is, no ‘flags’ (including airport), no ‘on demand’ private calls,” Frick says in the email. “We will focus our efforts and resources on serving the more predictable, and profitable account business.”

Operating as a taxi service comes with rules and regulations under the city’s general ordinances, including operating 24/7 and accepting “demand-responsive” riders, or riders who flag a vehicle down and are not stationed along a fixed route. According to the city’s general ordinances, operating accessible vehicles and airport shuttle services also separate taxi services from other transportation.

This immediate shift caused confusion for usual Green Cab riders and put increased strain on the city’s dwindling taxis fleet, says Bill Carter, Business Manager for Green Cab’s largest remaining competition, Union Cab of Madison Cooperative. (Note: Union Cab is a Tone Madison sponsor.)

“Basically overnight they went from being 24 hours to no longer being 24 hours,” Carter says. “Our people would get calls and they either tell them what the price is or they tell them how long the wait was and then people would express some frustration.”

Carter says Union Cab, which generally has 30 cabs on the road at any given time, has seen riders walk away from using the taxi business in the wake of this silent shift, as wait times and fares have increased.

Green Cab now follows state TNC rules instead of local taxi ordinances

Madison cab companies have skirted the 24/7 ordinance requirements in the past: a 2018 rash of armed taxi robberies led to Green Cab stopping overnight services. The onset of Transportation Network Companies (TNC) like Uber and Lyft Wisconsin paved the way for local-ordinance skirting. 

A 2015 bipartisan state legislative bill allows companies like Uber and Lyft to operate outside of local government rules. The bill, which soon became law, permits tech companies to operate as long as they obtain a yearly $5,000 state-regulated license, have insurance, and conduct background checks on drivers. A stricter Madison ordinance, which would have prohibited surge pricing and included 24/7 operation stipulations, was proposed ahead of the state bill in 2015, but the state bill hit the brakes on any local control.

Now, while taxi companies in Madison and beyond are subject to local ordinances, TNCs are monitored by the Department of Safety and Professional Services, the same department that grants licenses to acupuncturists, elevator mechanics, real estate brokers, and social workers, (and has also been in a massive application backlog for years attributed to dismal staffing shortages).

Green Cab fleets are in a sort of limbo as riders are used to hailing them down, but in theory, they should be operating using the transportation service’s app. Carter says he and other Union Cab drivers have seen Green Cab drivers operating as taxis, by picking up hailed riders or operating at the airport, since the operational changes were issued by Green Cab.

Mobility Transformation Inc CEO Shree Kalluri says all of the transportation companies they operate in Madison will now focus on pre-scheduled rides, with a focus on non-emergency medical visits and school contracts. 

“I don’t think we’re picking up flags anymore—I hope not,” Kalluri says.

He says the decision to stop on-demand services was conveyed to previous users who had business contracts and users who used online services, but Green Cab wasn’t immediately able to eliminate incoming calls and turn people away from on-demand rides.

References to the company operating as an on-demand service and 24/7 hours of operation can still be found in Google search metadata and on the Green Cab website.

Green Cab’s shift toward more predictable, pre-arranged rides 

Kalluri says the company shifted away from on-demand services because TNCs like Uber and Lyft have a “stranglehold on the market.” He says it was hard to change consumer behavior and Green Cab saw its most successful business with prearranged rides and contract services.

“Instead of being everything to everyone, we realized as a good business strategy, it is better for us to specialize in scheduled, pre-arranged transportation,” Kalluri says.

“All the transportation that we do is already pre-planned at least 24 hours ahead of time so that we got predictability on the demand side,” Kalluri says. “We can find the drivers and have a predictable supply, thereby making sure our quality of service will improve.”

Mobility Transformation is operating its electric fleet outside of Madison too. MTI Transit, LLC, another umbrella company, has a contract with the northwest city of Black River Falls to operate as a “Shared-Ride Taxi,” acting as public transportation for cities without dedicated metro services. More of these contracts—also known as Section 5311 transportation for a grant program that provides Wisconsin Department of Transportation funding, federal funding, and city dollars—are on the horizon for MTI Transit.

“We truly think that is a good opportunity to electrify and spread electrification into rural America,” Kalluri says.

Lack of warning leaves local cabs in turmoil, without recourse

As Mobility Transformation expands its transportation goals and footprint, the city of Madison now only has two dedicated taxi services in operation, Union Cab and Madison Taxi. The varied appendages of transportation, from pedestrian walkability to clamorously debated Bus Rapid Transit, have become central issues for Madison as the city reckons with its transportation goals. (And the city has a history of narrowly avoiding collisions with tech-based transportation companies and their ambitious goals.) 

City of Madison records received through a public records request show that the transportation department and other city engineering officials are aware of Green Cab’s departure from the taxi business. City of Madison Transportation Operations Analyst Keith Pollock told Tone Madison that apart from ordinance violations that range from a $20 to $200 fine and would be handled by the police department, the city doesn’t have a lot of enforcement power. 

“There’s really not that much that can be done,” Pollock says.

While Mobility Transformation is a private company and can make operational changes as its leadership chooses, Carter says providing notice to riders would have been helpful for the rest of the cab industry in Madison. He says he has spoken with the city’s Transportation Committee as well as the Transportation Policy and Planning Board about potential ordinance changes to mitigate future confusion and taxi turmoil.

Carter says the biggest concern is if ride-hailing services continue to operate in the fringe without oversight from the city, the city could “wake up one day and not have a part of its transportation.”

When Mobility Transformation initially made its splash onto Madison’s transportation scene by likening the cab company’s electric fleet to part of Telsa founder Elon Musk’s master plan, Carter says Union Cab and Madison Taxi were approached by the company as part of its acquisitions process.

If Mobility Transformation had acquired Union Cab and Madison Taxi, given the company’s recent sudden left turn into on-demand service only, Madison’s taxi landscape would have vanished.

“And then a couple of months ago (Green Cab) say no more cabs in Madison,” Carter says, “and so overnight there are no cabs. So for people that have a doctor’s appointment that is at times where a bus can’t serve, they’re out of luck. For elderly people who may not have smartphones, they’re out of luck. If you don’t have a credit card, you’re out of luck.”

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