When Uber arrived in New York City in 2011, yellow taxis dominated the streets and drivers paid $1 million for the coveted taxi medallions that gave them the right to pick up passengers.
Undeterred, Uber worked relentlessly to lure drivers away, mocking the taxi industry as inefficient, corrupt, greedy and even a “cartel.” The taxi industry, in turn, accused the company of bringing economic ruin to its drivers.
Now the once bitter rivals, who have battled for years for control of the city’s streets, are forging an unlikely alliance: Uber will team up with two cab companies, Curb and CMT, to allow New Yorkers to order a yellow cab. on the Uber app, the companies said Thursday.
The announcement — the first large-scale agreement of its kind in the US — comes as passengers increasingly embrace apps to order both Ubers and taxis. The companies are struggling to recover from a pandemic that has plagued the taxi industry as people have worked from home and tourists have stayed away.
“On the one hand, Uber and yellow taxi are all like water and oil,” said Bruce Schaller, a former city transportation official. “On the other hand, when you hail a taxi or go to your smartphone to catch an Uber, it will be the same experience as before. So it’s kind of like a big change and the same thing all at once.”
Starting later this spring, passengers will be able to open the Uber app and choose a taxi. Uber will then forward the request to the two taxi technology companies, which will inform drivers to pick up the passengers. The rate will be based on Uber’s pricing and policies, including price increases, which can significantly increase costs during peak hours.
The app displays a price upfront, as with all Uber rides, before the rider requests the ride. Riders pay about the same price for a yellow taxi as they would for a standard individual Uber ride, known as UberX, the company said.
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. According to city rules, ehail taxis – unlike street hail taxis – have the right to refuse fares.
Although Uber has clashed with taxi groups for years as it tried to take over markets around the world, it has found 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, first reported by The Wall Street Journal, will generate more revenue for the company as it receives a fee for each ride ordered through the app.
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.
Macdonald said adding taxis was about money: When Uber offers more modes of transportation, the company found, customers often use several of those methods, “spend more and are more loyal.”
Muhammad Rahman, 37, who has been driving a taxi in New York for eight years, said he hoped an Uber connection would increase fares in neighborhoods where hail hail is uncommon. “Uber customers are everywhere,” he said.
But another cab driver, Helmer Monroy, 67, was more skeptical. “I don’t think Uber is going to help the yellow taxi industry,” he said. “They didn’t destroy the industry, but they damaged it.”
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.
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 at high 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 returned but found drivers hadn’t come back in the same numbers, leading to dramatically higher fares and long wait times for trips.
Both companies admitted last year that they were struggling to attract enough drivers to meet demand, but more recently said the problem is easing. Uber said the number of drivers on its platform was at its highest level since February 2020.
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. By adding thousands of taxi drivers, the departure of other drivers can be compensated.
New York’s new Uber taxi partnership did not require approval from the city’s Taxi and Limousine Commission, which oversees taxis and rented vehicles, including Ubers, city officials said.
“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 taxi apps, Curb and Arro, which offer upfront prices 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.
Curb, which has more than two million users in New York City, has seen a spike in demand over the past year of the pandemic. According to Curb Chief Executive Officer Amos Tamam, the average daily number of journeys by individual consumers has increased to more than 15,000 citywide journeys, from around 2,000 in 2019.
“Taxis came back on consumer radar,” Mr Tamam said, adding that the partnership with Uber could lead to a “significant increase” in the number of rides for taxi drivers.
When a rider requests a yellow taxi through the Uber app, 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 not always. Likewise, sometimes, but not always, drivers receive more for a metered ride than for a ride ordered through the Uber app. 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, Mr Schaller added, “but I wouldn’t have predicted 2022 if you had asked me in 2019.”
Brian Rosenthal contributed to reporting.
