If you can’t disrupt them, join them? Once poised to render the taxi system obsolete, Uber reached an agreement to list all New York City taxis on its app. Later this spring, New York City riders will be able to hail a cab right from their Uber apps, helping the company combat its driver shortage and rising fares.
“Our partnerships with the taxi industry look different around the world and as we look at the next five years, we strongly believe that there is no world in which taxis and Uber exist separately,” Uber spokesperson Conor Ferguson told TechCrunch via email. “There is just too much to gain for both sides. Taxis help us unlock new markets. In fact, it’s now our primary product in places like Hong Kong and Turkey.”
The partnership works by integrating Uber’s software with existing taxi software from companies like CMT and Curb, which run in 14,000 New York City taxis. According to reports from the Wall Street Journal, taxi fares via Uber will be the around the same price as a generic Uber X. Cab drivers who pick up Uber passengers will be paid the same rate as standard Uber drivers — their payment is determined by a minimum time and distance rate. But Uber uses different metrics to calculate pay than taxis. So, taxi drivers will be able to see their expected earnings before accepting an Uber passenger, a courtesy that Uber doesn’t extend to its existing drivers. Uber takes about 20% of fares, according to its investor reports, but Uber has not disclosed the terms of its deal with the New York City Taxi and Limousine Commission, like what kind of cut will be deducted from taxi rides.
Taxi drivers around the world have protested the prevalence of ride share businesses like Uber. In France, the company once operated at a loss to lure customers and drivers away from existing infrastructure. This overall model of accruing debt to keep prices low continued until the company managed a small profit in Q3 2021, despite still losing $2.4 billion dollars. The decision to work with taxi drivers has proven successful overseas — Uber has partnerships with taxi providers in countries like Spain, Colombia, Austria, Germany, South Korea and more — so it’s no wonder that the company will try this in one of its biggest U.S. markets.