While most jurisdictions require taxicab
operators to be licensed
, many unlicensed cabs are in operation. Some of these are marked taxi vehicles (sometimes referred to as "gypsy cabs"
), and others are personal vehicles used by an individual to offer unauthorized taxi-like services (sometimes called a "hack"
). Illegal cabs tend to be more prevalent in cities with medallion systems
, which restrict the number of legal cabs in operation. Illegal taxicab operation is generally seen as a victimless crime
although it may affect the economic value of licensed taxis, and safety regulations may be bypassed. Both the drivers and passengers of illegal cabs are taking this risk. However, passengers sometimes find illegal cabs to be more available, convenient, or economical than licensed ones.
A variety of terms are used in the industry to describe legal and illegal transportation providers. Hacks
is a common term that originated with the hackney horse
, a breed of horse typically offered for-hire in the 19th century. Other terms used are gypsy cab
, livery cab
, car service
, or jitney cab
. The phrases vary by locality and often refer to different classes of licensed transportation providers. For example, in Philadelphia a cab driver's license is called a hacker's license
, while in New York City livery cabs
are licensed for telephone dispatch only.
Unlicensed cabs may be found cruising the residential streets of a city, typically in the working class neighborhoods. Sometimes, drivers will also wait at a location where taxi service is in demand, such as airport
or train station
arrival areas or shopping centers
, asking arriving passengers if they need a ride. Unlicensed taxis often do not have meters, so the fare is usually agreed to at the beginning of the ride. The car itself is usually large, similar in feel to a licensed taxi.
In New York City, and some other cities, non medallion car services (also called livery cabs) lawfully exist, but are only supposed to respond to telephone dispatch. They cannot legally pick up street hails or enter taxi stands at airports. However, outside of the core Manhattan business district, livery cabs are ubiquitous and will respond to street hails.
Some areas also have sedan services, which likewise, respond to telephone dispatch. Many sedan services, though legal, use older vehicles, therefore placing drivers and passengers at risk from mechanical failure. Drivers are also more vulnerable to crime as sedans have less protection than cabs.
Passengers who accept rides with such unlicensed cabs are doing so at their own risk, as drivers are operating outside of legal regulation, and are not guaranteed to have driver's licenses or have vehicles that are legally registered, in good mechanical repair, or meeting safety standards. Additionally, the hacks themselves may have criminal backgrounds and may pose a danger to their passengers. In some cases, as with licensed cabs, a ride with a hack may turn out to be deadly.
The drivers themselves are also at risk. Illegal cabs seldom have a Plexiglas partition to protect the driver and may lack other security features, such as two way radios, that licensed cars have. These factors, combined with the fact that they carry cash, make them a target of criminals.
There are also non-taxicab based unlicensed transportation providers. Examples include "dollar vans" plying city bus routes in New York City, and van services that offer rides between major cities.
In some places, providing a ride in a personal vehicle as a part of another job, such as caregiving, may be legal, sometimes with regulation of certain factors, such as insurance coverage.
In some large American cities, as well as Hong Kong, a medallion system
is used to license cabs. The city issues a fixed number of medallions, and only medallion taxis are allowed to pick up fares. In general, this leads to medallions becoming ever more expensive -- a New York City corporate medallion sells for more than $600,000. Medallions are transferable, and while some cab drivers own their own medallion, most must lease one on a daily or weekly basis from a fleet owner.
The medallion system has several effects upon the illegal transportation market. By acting as a barrier to entry to the taxi market, it has the unintended consequence of creating a market for unlicensed cabs, especially in areas that tend to be underserved by medallion cabs. Taxi medallions tend to increase in value over time, and their owners and leases tend to be very eager to protect their exclusive rights, for example, by lobbying for stricter enforcement against unlicensed cabs.
In Working Class Neighborhoods
In America, there is significant anecdotal evidence that unlicensed cabs are mostly found in working class neighborhoods of large cities . There are likely several reasons for this. First is a lack of licensed taxis -- due to the perception, by cab drivers, of safety issues or that better tips can be had in wealthier neighborhoods. Compounding this, residents of such neighborhoods own fewer cars per capita and thus are more dependent on public transportation. Moreover, residents of such neighborhoods may favor unlicensed cabs even if licensed taxis are available. The fact that the fare is agreed to or known in advance erases fears of the meter running up a higher than expected fare. Some residents use the same driver to commute to work or shopping and consider them very reliable. Lastly, in Baltimore, supermarkets in working class neighborhoods frequently have "courtesy drivers" who, although not employed by the supermarket, have shown ID to management and are allowed to wait in front of the store for fares. Unlike licensed cab drivers, these courtesy drivers will also help to carry groceries up to one's apartment.