Uber strikes deal to list all New York taxis on its app

The company has struck a deal to list all New York City taxis on its app, an alliance that could ease the ride-sharing giant’s driver shortage and temper high fares while directing more business to drivers in taxi, whose livelihoods have been affected by the emergence of the car. application sharing and the pandemic.

While Uber has formed partnerships with select taxi operators overseas and passengers in several U.S. cities can use its app to book taxis if taxi drivers choose to be listed there, the New York City is its first citywide partnership in the United States New York, one of Uber’s most lucrative markets, has been a battleground for the company and the iconic yellow cabs of the city for years.

“It’s bigger and bolder than anything we’ve done,” said Andrew Macdonald, head of global mobility at Uber. The company plans to launch the offer to riders later this spring.

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As part of the agreement, technology partners licensed to the New York City Taxi and Limousine Commission will integrate their taxi apps’ software with that of Uber. These apps, operated by Creative Mobile Technologies and Curb Mobility, are used by the city’s roughly 14,000 taxis, according to Uber. Both companies allow credit card payments in taxis and operate screens that display weather, news and advertisements to passengers.

Passengers will pay roughly the same fare for taxi rides as for Uber X rides, according to the company. Uber drivers in New York are paid a minimum time and distance fare set by the TLC. Uber said its drivers typically earn more than that rate. Taxi drivers who agree to take Uber passengers will be paid the same.

The yellow cab’s metered fare is based on a different calculation, which means taxi drivers can earn less, the same, or more on an Uber ride depending on the nature of the ride. Unlike Uber drivers in New York, taxi drivers will see expected earnings before a trip and can decline rides they don’t think are worth it, Uber said.

Uber and its taxi partners will receive a fare reduction. The companies declined to specify terms. Uber’s average overall acceptance rate for rides in the fourth quarter was 20%.

Uber shares rose 5% to $34.70 on Thursday.

For Uber, the alliance marks a departure. Having once promised to disrupt America’s taxi industry, it is now betting that traditional taxis will fuel its next wave of growth. By 2025, Uber wants to list all the taxis in the world on its app. “It’s certainly ambitious,” Mr. Macdonald said, but “I certainly think it’s possible.”

A sparsely populated taxi rank at New York’s LaGuardia Airport last year as Covid-19 curtailed business.


Photo:

Angela Weiss/Agence France-Presse/Getty Images

Meera Joshi, deputy mayor of New York who oversees the TLC, said the alliance is creating economic opportunity for taxi drivers “without adding more and more cars.”

“The word ‘disruption’ was almost kind of a superficial word,” said Ms Joshi, who previously served as TLC commissioner. Uber has modernized the taxi industry, lowered barriers to entry and accustomed passengers to service at the push of a button. But that didn’t kill taxis or change the fundamental nature of the service, she said.

Taxi groups have fought Uber for years. In many countries, unions and lobbyists for major taxi companies were behind court cases banning the app. Regulators have taken action against the worker model at the company’s request. Taxi drivers in major European cities such as London, Paris and Rome have sometimes rumbled through traffic in protest at Uber.

The company initially forged alliances with taxis to save its business in some overseas markets, but doubled down on that strategy when it became a growth engine. Uber’s attempts to woo taxis were boosted during the pandemic when the main street driver business dried up. The company says it listed more than 122,000 new taxi drivers on its app last year, four times more than in 2020.

In Barcelona, ​​for example, Uber suspended operations after the local government imposed a rule requiring rideshare drivers to wait 15 minutes before picking up passengers. After a two-year hiatus, Uber returned to the city last year with several hundred taxis on its app, following the model’s use in Madrid.

Also in Austria, Uber turned to recruiting taxis when a rule last year restricted its activities by requiring drivers to obtain taxi licenses. A recruitment push has recruited more than 2,000 taxi drivers in the country, making it one of Uber’s largest foreign taxi markets, according to the company.

Your average Uber or Lyft ride costs 50% more this summer than before the pandemic. But prices were gradually rising even before the closings began. Here’s what drove ride-sharing prices up and how companies are working to bring them down. Composite photo: David Fang/WSJ (Video from 08/09/21)

In Hong Kong, where taxis are a cheaper and more convenient option for commuters, Uber acquired a popular taxi-cab app last year, bringing thousands of city taxis into its fold.

Uber has everything to gain beyond its rides business. Mr Macdonald said 35% of people who started using the app to hail taxis went on to use other Uber products, such as its food delivery service.

The pandemic has dealt a severe blow to the taxi industry and drivers want to maximize their revenue to offset those losses, said Ron Sherman, chief executive of Creative Mobile Technologies, one of Uber’s partners in New York.

The Uber alliance gives drivers the chance to get a return passenger on trips outside of Manhattan, when they often return empty, he said, which is especially painful as the prices of the gasoline are skyrocketing. Mr. Sherman’s company has a taxi app called Arro, but its user base is no match for Uber’s, he said.

Meanwhile, Uber is running out of gig drivers in the US During the health crisis, they’ve taken on other jobs like delivering food and groceries, and the resulting shortage has pushed up ride prices to record levels last year. Drivers are coming back gradually but riders are coming back faster, Uber and its rival Lyft Inc.

to say. Prices for their rides have fallen slightly from last year’s highs, but last month were still 17% higher on average than in January 2021, according to market research firm YipitData.

“They have the demand and we have the supply,” Sherman said. Uber “needed more supply, so it made sense for us to start talking about a partnership,” he said.

Sheik Jalloh, who has been driving a taxi in New York for more than a decade, said the deal would help his industry keep up with the changing times. “This is the technology on which the new generation relies. No one wants to wait for a taxi when it’s raining or snowing. They just want to call it,” he said.

Some Uber drivers fear the alliance could discourage the company from paying them the bonuses it offers during the labor shortage. Many drivers have returned to ridesharing jobs because of these incentives.

“You’re going to have a whole bunch of drivers by your side,” said Edison Morcelo, who drives full-time for Uber and Lyft in New York. Signing up thousands of new drivers could mean longer wait times for rides and fewer bonuses for Uber drivers.

Analysts said Thursday that Uber will have a leading advantage with the partnership over Lyft in one of the world’s most lucrative ride-sharing markets. Lyft said it was not immediately looking at taxi offers.

Write to Preetika Rana at [email protected]

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