New Yorkers who order a ride via the Uber app will soon be able to choose a yellow taxi as part of a new partnership between the ride giant and two taxi technology companies.
The deal will open for everyone in New York City later this spring and will allow Uber riders to pay roughly the same price for a yellow cab as they would for a standard individual Uber ride, known as UberX, the company said.
They get a price upfront in the app before requesting the trip, as they currently do with all Uber rides.
Yellow cab drivers who respond to greetings from the Uber app also see the price of a ride in advance and have the option to accept or decline it under the deal.
The partnership with Uber-taxi is the first large-scale deal in the United States. and comes as New York City’s blighted yellow taxi industry has been decimated by the coronavirus pandemic, with many people still working from home and many tourists staying away.
The partnership is also a sea change for Uber, which has clashed with taxi groups for years as it tried to take over markets around the world. But Uber has recently discovered that partnering with taxi companies, rather than fighting them, can boost its business, especially abroad. Partnerships with taxi fleets and technology companies in other countries allow Uber drivers to order taxis through the app, as will be the case in New York.
Those agreements, coupled with the New York partnership, “seem to reflect a new page or attitude from Uber willing to work more closely with the industry it once tried to disrupt,” said Tom White, a senior research analyst. . with the financial firm DA Davidson.
“Being a little kinder” with taxi companies could help Uber “improve Uber’s favor and improve Uber’s relationships with lawmakers and policymakers” in those cities, he added.
Uber said it integrated with more than 2,500 taxis in Spain, partnered with taxi service TaxExpress in Colombia, acquired the local HK Taxi app in Hong Kong last year, partnered with SK Telecom in South Korea and also taxis in other countries including Germany, Austria and Turkey.
Uber’s new partnership with the New York taxi industry, previously reported by The Wall Street Journal, will generate more revenue for the company as it receives a fee for each ride ordered through its app.
Before the pandemic, taxi drivers in New York lost fares on Uber and Lyft’s ride-app services and faced financial ruin after taking out loans to buy medallions — city-issued permits required to drive a yellow card. to own a taxi – at inflated prices.
Uber has faced its own challenges during the pandemic. In the beginning, when the demand for rides plummeted and drivers worried about contracting the coronavirus, many left the platform.
As the U.S. economy recovered and cities eased restrictions, customers flocked back to the Uber and Lyft apps, only to find that drivers hadn’t returned in the same numbers, leading to dramatically higher fares and long wait times for trips.
Both companies acknowledged last year that they were struggling to attract enough drivers to meet demand, and they offered incentives such as cash bonuses to get drivers back. The companies say the problem is decreasing and Uber said the number of drivers on its platform was at its highest level since February 2020.
Gridwise, an app that helps drivers track their earnings and odometer data, has found that drivers’ earnings on ride-hail apps have also increased in recent months.
Still, many drivers remain dissatisfied with how much money they make, with some saying they drive less or not at all since high gas prices began to eat into their earnings.
Antonio Cruz, 50, a Brooklyn resident who drives for Uber two days a week, said he was concerned the new Uber-taxi partnership could lead to more competition from yellow cabs, especially on the days he works in Manhattan. . “We could lose business,” he said.
Bruce Schaller, a former city transportation official, said the short-term benefit of the deal was to give Uber access to more drivers.
“If they say they’re fine with drivers now, fine, I’m just not buying it,” Mr Schaller added. “With the pandemic plus gas prices, more drivers is always good. Even if they have ‘enough’, it’s good for Uber to have a larger number of drivers.”
At Uber’s investor day in February, Andrew Macdonald, Uber’s senior vice president of mobility and operations, said the company aims to have every taxi in the world on its platform by 2025 and had already added 122,000 taxis to the app last year.
Uber’s deal with New York taxi companies may also put pressure on its rival, Lyft, to respond.
“I would expect Lyft to make a similar deal — in fact, I expect them to make the exact same deal,” Mr Schaller said. Lyft did not immediately respond to a request for comment.
New York’s new Uber taxi partnership did not require approval from the city’s Taxi and Limousine Commission, which oversees the taxi industry, city officials said, though the agency will still oversee the rules for all hired drivers. .
“We are always interested in innovative tools that can increase economic opportunities for taxi drivers,” said the agency’s acting commissioner Ryan Wanttaja. “We’re excited about any proposal to make it easier for passengers to connect to taxis and look forward to learning more about this agreement between Uber and the taxi apps and making sure it complies with TLC rules.”
New Yorkers can still wave down yellow cabs on the street or order them through two cab apps, Curb and Arro, which offer upfront pricing, much like Uber rides.
The city’s 13,587 yellow taxis are equipped with technology systems from Curb or Creative Mobile Technologies, which operates the Arro app. The systems also provide monitors for driver and passenger information in each vehicle, accept credit card payments from riders and pay drivers.
When a rider requests a yellow taxi through the Uber app, the ride is directed to Curb or CMT, which uses Uber’s pricing and payment structures. Both Uber and the taxi company receive reimbursements from the rides. Taxi drivers are paid through the Curb and CMT systems.
It’s hard to say how the deal will affect passengers and drivers, in part because ride fees and driver payments are controlled by algorithms that vary depending on the app, the length and distance of a ride, when drivers request cars, and other factors.
In some cases, passengers may pay more for a taxi they order through the Uber app than for a taxi they hail on the street, but that’s not always true. Likewise, drivers may receive more for a metered ride than for a ride ordered through the Uber app, but that’s not always true either. Uber said it would provide more details about the taxi option in the coming months.
Bhairavi Desai, the head of the Taxi Workers Alliance, a group representing taxi drivers, said she believed drivers who accept travel through the Uber app would earn less than picking someone up from the street and taking them to the same place. .
She urged drivers to negotiate better rates from Uber, noting that the deal was made “at a time when the companies need this deal more than the drivers” because Uber is “killing drivers”.
“We are going to use it as an opportunity to negotiate good terms for the drivers,” she said.
Others expressed more optimism.
Mr Schaller said that if the new system were implemented properly, according to existing regulations, it would benefit both drivers and customers.
“I’ve always expected that eventually there would be a convergence of yellow cabs and ride-hail apps, but I wouldn’t have predicted 2022 if you had asked me in 2019,” added Mr Schaller.
