Uber Technologies is fast becoming friends with a former foe. Indeed, the company that vowed to disrupt the U.S. taxi industry is now betting that traditional cabs will fuel its next wave of growth, reports The Wall Street Journal.
The peer-to-peer ridesharing, food delivery, and transportation network company has reached an agreement to list all New York City taxis on its app—an alliance that could ease the ride-hailing giant’s driver shortage and temper high fares; while directing more business to cabdrivers, whose livelihoods have been affected by the emergence of car-sharing apps and the pandemic.
While Uber has formed partnerships with some taxi operators overseas—and riders in several U.S. cities can use its app to book taxis if cabdrivers choose to be listed there—the New York City alliance is its first citywide partnership nationwide.
New York, one of Uber’s most lucrative markets, has been a battlefield for the company and the city’s iconic yellow taxis for years.
“It’s bigger and bolder than anything we’ve done,” said Andrew Macdonald, Uber’s SVP of Global Mobility. The company expects to launch the offering to riders later this spring.
As part of the deal, the New York City Taxi and Limousine Commission’s licensed technology partners will integrate their taxi-hailing apps’ software with Uber’s. Those apps—run by Creative Mobile Technologies and Curb Mobility—are used by the city’s roughly 14,000 taxis, according to Uber. The two companies enable credit-card payments in taxis, and also run the screens that display the weather, news and ads to riders.
Passengers will pay roughly the same fare for taxi rides as for Uber X rides, according to the company. Uber drivers in New York City receive a minimum time and distance rate set by the TLC. Uber said its drivers typically earn more than that rate. Cabdrivers who agree to take Uber passengers will be paid in the same way.
The yellow-cab metered rate is based on a different calculus, meaning taxi drivers can make less, the same, or more on an Uber ride, depending on the nature of the trip. Unlike Uber drivers in New York, taxi drivers will see expected earnings before a trip and will be able to decline rides they don’t think are worth their while, Uber said.
Uber and its taxi partners will receive a cut of the fare. The companies declined to specify the terms. Uber’s average global take rate for rides in the fourth quarter was 20%.
Research contact: @WSJ