Uber partners with yellow taxi companies in New York City

When Uber arrived in New York City in 2011, yellow taxis took over the streets and drivers paid $1 million for coveted taxi medals that gave them the right to carry passengers.

Uber worked relentlessly to lure passengers away, and the taxi industry was deemed ineffective, corrupt, greedy and even a “cartel”. The taxi industry, in turn, accused the company of wreaking economic havoc on its drivers.

Now, the once rivals, who fought for years for control of city streets, are forging an unlikely alliance: Uber will team up with two taxi companies, Curb and CMT, to let New Yorkers order a yellow cab on the Uber app, reports The companies reported on Thursday.

The announcement – the first large-scale agreement of its kind in the US – comes at a time when passengers are increasingly adopting apps to order both Ubers and taxis. Companies are struggling to Recovering from a pandemic Which hurt the taxi industry as people worked from their homes and tourists stayed away.

“On the one hand, Uber and the yellow taxi look exactly like water and oil,” said Bruce Schaller, a former city transportation official. “On the other hand, when you get in a taxi or go to your smartphone to get an Uber, it will be the same experience as before. So it is kind of a big change and the same thing in one go.”

Starting late this spring, riders 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 the drivers to pick up the passengers. The fare will depend on Uber’s rates and policies, including price increases, which can significantly increase the cost at peak times.

The app will display an up-front price, as with all Uber rides, before the passenger requests the ride. The company said that passengers will pay roughly the same price for a yellow taxi as they would for a standard single ride with Uber, known as UberX.

Yellow taxi drivers who respond to the Uber app will also see the pricing of the ride up front and under the deal will have the option to accept or decline it. Under city regulations, ehail taxis – unlike street taxis – have the right to refuse to pay fares.

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Although Uber has Clashed with taxi groups For years it tried to control the markets around the worldIt has discovered that partnering with taxi companies rather than fighting them can boost their business, especially abroad. Partnerships with taxi fleets and tech companies in other countries allow Uber riders to order taxis on the app, as in New York.

Tom White, senior research analyst, said these agreements, along with the New York partnership, “appear to reflect a new leaf or new position at Uber as it is willing to work closely with the industry that was previously trying to disrupt” with DA Davidson Financial.

He added that being “friendlier” with taxi companies could help Uber “to gain support and facilitate Uber’s relationships with lawmakers and policymakers” in those cities.

Uber said it had merged with more than 2,500 taxis in Spain, partnered with taxi service TaxExpress in Colombia, acquired local Hong Kong app HK Taxi last year, started a partnership with SK Telecom in South Korea, and worked with taxis in other countries. other. countries, including Germany, Austria and Turkey.

Uber’s new partnership with the New York taxi industry, which was first reported by the Wall Street Journal, will bring more revenue to the company as it receives a fee for every ride ordered through its app.

At Uber Investors Day in February, Andrew MacDonald, Uber’s senior vice president of mobility and commercial operations, said the company wants every taxi in the world on its platform by 2025.

Mr MacDonald said the addition of taxis was about the money: When Uber offered more transportation, the company found that customers often used many of these methods, “spending more and being more loyal”.

Muhammad Rahman, 37, who has been driving a taxi in New York for eight years, said he hopes the Uber connection will fetch more prices in neighborhoods where taxi use is less common. “Uber customers are everywhere,” he said.

But another taxi driver, Helmer Munroy, 67, was more skeptical. “I don’t think Uber will help the yellow taxi industry,” he said. “They didn’t destroy the industry – but they hurt it.”

Antonio Cruz, a 50-year-old Brooklyn resident who drives for Uber two days a week, said he worries that the new partnership between taxis and Uber could mean more competition from yellow taxis, especially on the days he works in Manhattan. . “We could lose business,” he said.

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Before the pandemic, New York taxi drivers were losing wages for ride-app services at Uber’s and Lyft and facing financial ruin after take out loans To buy medals at inflated prices.

Uber has faced its own challenges during the pandemic. Early on, with demand for rides dropping and drivers worried about contracting the coronavirus, many left the platform.

With the US economy recovering and cities loosening restrictions, customers returned but found that drivers were not coming back in the same numbers, leading to skyrocketing prices and long waiting times for trips.

Both companies recognized last year They were struggling to attract enough drivers to keep up with demand, but recently said the problem is waning. Uber said the number of drivers on its platform reached its highest level since February 2020.

However, many drivers remain unhappy with the amount of money they make, and some said they were driving less or not at all. Since high gas prices began to eat up their profits. The addition of thousands of taxi drivers could help offset the departure of other drivers.

City officials said the new Uber-Taxi partnership in New York does not require approval from the city’s Taxi and Limousine Commission, which oversees taxis and rental vehicles, including Ubers.

“We have always been interested in innovative tools that can expand economic opportunities for taxi drivers,” said Acting Agency Commissioner Ryan Wantaga. “We are excited about any proposal to connect riders to taxis more easily and look forward to learning more about this agreement between Uber and taxi apps and ensuring they comply with TLC rules.”

New Yorkers will still be able to direct or order yellow taxis on the street through two taxi apps, Curb and Arro, which offer upfront fares as do Uber rides.

The city’s 13,587 yellow taxis are equipped with technology systems from Curb or Creative Mobile Technologies that operate the Arro app.

Curb, which has more than two million users in New York City, has seen a surge in demand over the past year of the pandemic. Average daily trips for individual consumers rose to more than 15,000 trips across the city from about 2,000 in 2019, according to Amos Tammam, Curb CEO.

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“Taxis are back on the consumer radar,” said Mr. Tammam, adding that the partnership with Uber could lead to a “significant increase” in rides for taxi drivers.

When a passenger requests a yellow cab via the Uber app, both Uber and the taxi company will receive ride fees. Taxi drivers will continue to be paid through the Curb and CMT systems.

It is difficult to say how the deal will affect passengers and drivers, in part because trip costs and driver payments are controlled by algorithms that vary depending on the application, the length and distance of the trip, the time of day when passengers order the cars and more. Factors.

In some cases, riders may pay more for a taxi they order via the Uber app than they would on the street, but not always. Likewise, drivers may sometimes, but not always, receive for a specific trip more trips ordered through the Uber app. Uber said it will provide more details about the taxi option in the coming months.

Bhairavi Desai, president of the Taxi Workers Alliance, a group that represents taxi drivers, said she believes drivers who accept rides from the Uber app will earn less than if they pick someone off the street and take them to the same place.

She urged drivers to negotiate better rates than Uber, noting that the agreement was struck “at a time when companies need this deal more than drivers need” because Uber “bleeds drivers.”

“We will take it as an opportunity to negotiate appropriate terms for the drivers,” she said.

Others expressed greater optimism.

Mr Schaller said that if the new system is implemented correctly, in accordance with current regulations, it should benefit drivers and customers alike.

Mr Schaller added: “I had always expected there would eventually be a convergence between yellow taxis and ride-hailing apps, but I wasn’t expecting 2022 if you ask me in 2019.”

Brian Rosenthal contributed reporting.

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