Uber partners with yellow taxi companies in New York City

New Yorkers who order a ride through the Uber app will soon be able to choose a yellow cab under a new partnership between the taxi giant and two tech companies.

The company, which launches later this spring for anyone in New York City, said the deal will enable Uber riders to pay roughly the same price for a yellow taxi as they would for a standard single ride with Uber, known as UberX.

They’ll get a price up front in the app before they order the ride, as they currently do with all Uber rides.

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.

The Uber-Taxi partnership is the first large-scale deal in the United States. And come as the yellow taxi industry besieged in New York City Because of the coronavirus pandemicMany people are still working from home and many tourists are staying away.

The partnership is also a bit of a change for Uber, which has Clashed with taxi groups For years it tried to control the 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 tech companies in other countries allow Uber riders to order taxis on the app, as in New York.

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

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 app HK Taxi in Hong Kong last year, started a partnership with SK Telecom in South Korea, and also 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 previously 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.

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 – city-issued permits are required to own a yellow taxi – 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.

As the US economy recovers and cities loosen restrictions, customers are returning to the Uber and Lyft apps, but find that drivers are 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, and they offered incentives such as cash rewards for getting drivers back. The companies say the problem is receding, and Uber said the number of drivers on its platform was at the highest level since February 2020.

Gridwise, an app that helps drivers keep track of their earnings and data, found that drivers’ earnings on ride apps have also risen in recent months.

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.

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.

The short-term benefit of the deal is to provide Uber with access to more drivers, said Bruce Schaller, a former city transportation official.

“If they say they’re okay with the drivers now, that’s fine, I just don’t buy it,” Schaller added. “With the pandemic in addition to gas prices, more drivers are always good. Even if they have ‘enough,’ having a larger driver base there is good for Uber.”

At Uber Investors Day in February, Andrew MacDonald, Uber’s senior vice president of mobility and business operations, said the company wanted every taxi in the world on its platform by 2025 and that it had already added 122,000 taxis to the app last year.

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Uber’s deal with New York taxi companies could also put pressure on its rival, Lyft, to respond.

“I would expect Lyft to do a similar deal – in fact I would expect them to do the exact same deal,” he said. Schaller said. Lyft did not immediately respond to a request for comment.

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 the taxi industry, although the agency will still oversee rules covering all charter drivers.

“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 can still use yellow taxis on the street or order through two taxi apps, Curb and Arro, which offer upfront fares like 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. The systems also provide monitoring devices for driver and passenger information in each vehicle, receiving credit card payments from passengers and paying drivers.

When a passenger requests a yellow cab via the Uber app, the ride will be forwarded to Curb or CMT, which will use Uber’s pricing and payment structures. Both Uber and the taxi company will charge 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, passengers may pay more for a taxi they order through the Uber app than for a taxi they drop off on the street, but this may not always be true. Likewise, drivers for a specific trip may get more trips ordered through the Uber app, but that may not always be true either. 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.

“I 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,” he said. Schaller added.