After almost a decade of animosity and lawsuits, cabbies might help Uber weather a labor shortage—and take a bite out of the competition.
WIRED – After almost a decade of fights and lawsuits, Uber and New York taxis are making nice. The ride-hailing firm and two companies that build technology for taxis, Curb Mobility and Creative Mobile Technologies, announced last week that they had reached a deal to put taxis on the Uber platform. For riders, that means the UberX they order could show up as a yellow cab. Taxi drivers, meanwhile, will be offered Uber trips alongside other electronic hails from other apps.
A time traveler from the mid-2010s would hardly believe it. Back then, Uber CEO Travis Kalanick said his company was engaged in a global political campaign, “and the opponent is an asshole named Taxi.” In New York, taxi drivers blamed ride-hail companies for the sharp dip in rides, for the collapse of the value of taxi medallions, a license that allows a taxi to operate in the city, and eventually, for a series of tragic driver suicides. When the city tried to crack down on ride-hail, Uber called on its customers to rain complaints onto City Hall and poked at the mayor within its app. New York responded with more onerous regulations, aimed at cutting ride-hail vehicles’ traffic and environmental effects. The lawsuits flew.
But Uber has a less truculent CEO now—the former Expedia executive Dara Khosrowshahi—and all that “asshole” stuff seems to be behind it.
“Uber has a long history of partnering with the taxi industry to provide drivers with more ways to earn and riders with another transportation option,” Andrew Macdonald, the company’s senior vice president of mobility and business operations, said in a statement.
“To quote [songwriter] Jerry Garcia, ‘What a long, strange trip it’s been,’” says Matthew Daus, a former New York City taxi commissioner who is now president of the International Association of Transportation Regulators, a nonprofit professional association of government officials.
The taxi technology companies say the deal is designed to give taxi drivers access to more potential customers. Today, New Yorkers can hail taxi cabs on the street, or through the companies’ apps, which only offer taxi rides. But Uber’s app already lives on many city residents’ and visitors’ phones. “I strongly believe that [the taxi industry] has much more room to grow,” says Amos Tamam, the CEO of Curb Mobility.
Uber, meanwhile, gains access to nearly 14,000 new cars and their drivers, at a time when both might be in short supply. Many workers stopped driving for the company during the pandemic, and the ride-hail industry had 22 percent fewer drivers in New York at the beginning of this year than it did at its height in April 2019, according to data from the Taxi and Limousine Commission. And that’s before gas prices led many ride-hail drivers to reexamine whether driving made financial sense. (Uber says it now has the most US drivers on the app since the pandemic started, and that it hasn’t seen a decrease in drivers in the US and Canada over the last few months.)
Uber has been especially squeezed in New York, because the city has since 2018 capped the number of ride-hail vehicles allowed to operate on its roads. As of January, there were just over 96,000 vehicle licenses granted in the city, according to the Taxi and Limousine Commission, though 30,000 of them weren’t used that month. This new partnership will allow Uber to give more rides without adding more cars to the road.
The move also has a convenient upside for the once-fractious company: It might endear Uber to the very regulators it used to clash with. From nearly the start, Uber dodged government taxi rules by insisting it was a tech platform, not a taxi company. Relations worsened in 2017, when The New York Times reported that the company had used special software to evade government oversight. But now, when it comes to partnerships between entrenched local taxicabs and ride-hail, regulators “want to make this ethos work,” says Daus, the former taxi commissioner. More partnerships between taxi companies and ride-hailers will be good for customers, he says, because it will give people access to more rides, more easily.
Uber has struck partnerships with taxi companies in other places in the world, such as Spain, Colombia, Germany, Austria, and Hong Kong, where it acquired a taxi-hailing app last year.
The deal will have to be approved by the city’s Taxi and Limousine Commission. In a statement, acting commissioner Ryan Wanttaja said, “We are always interested in innovative tools that can expand economic opportunities for taxi drivers.”
Putting cabs on the Uber app could be good news for wheelchair users. There are under 4,000 wheelchair-accessible ride-hail vehicles on the city’s roads, and riders have complained they have to wait twice as long to catch a wheelchair-accessible ride than those who don’t need them. Though the city is behind on its court-mandated goal to make half of its yellow cabs wheelchair accessible, adding taxis to the Uber app could double the number of cars available with a few phone taps.
New York drivers, meanwhile, are still figuring out what the partnership will mean for them. The New York Taxi Worker Alliance, which represents 21,000 drivers in the city, says that taxi drivers will make an average 15 percent less per trip by picking up rides on the Uber app than they would with the traditional metered fare.
Uber says that when taxis first start to appear on its app this spring, drivers’ earnings will be based on the rules set out by the city, but it didn’t answer questions about what may happen in the future. “If Uber and Curb think they can slide in with a payment structure that’s broken for Uber drivers and piece it together on the backs of yellow cab drivers, they’re in for a sobering surprise,” the group’s executive director, Bhairavi Desai, said in a statement.
Taxi drivers who spoke to the Times last week said the new deal could help them pick up more trips. Accepting UberX rides could make taxi drivers’ journeys back to the city’s core more profitable, because the app’s users are more likely to request rides outside of dense Manhattan. But others were skeptical of Uber because of the role the company played in upending the industry in the last decade. Unlike other Uber drivers in the city, taxi drivers will be able to see where and how much a trip is worth before accepting the ride, and won’t face penalties for rejecting them before a trip has started. Taxi drivers will also be able to opt out of Uber hails entirely, says Tamam, the Curb Mobility CEO.
An app-based workers’ group in the city had a slightly different message. “Whether we started driving for Uber five years ago or five minutes ago, what app drivers have in common is that we are underpaid and under-protected by app companies in their relentless pursuit of profits,” said Emma Woods, a spokesperson for Justice for App Workers, which represents 100,000 ride-hail drivers and delivery workers around the city. “We are fighting for all app workers, and we welcome the yellow cab drivers to join our movement.”