In New York, Uber will soon integrate the famous yellow taxis into its application. In addition to drastically increasing its offer, the American giant finally seems to be making peace with the taxi industry.
The contours of the partnership
This is a deal that could turn an entire industry upside down. Thanks to this, the 14,000 or so taxis operating in the Big Apple will have access to Uber’s very large customer base. Specifically, New York City Taxicab and Limousine Board Approved Technology Partners will integrate their taxi ride app software with Uber’s. These applications, managed by Creative Mobile Technologies and Curb Mobility, are used by New York taxis and allow payment by credit card in taxis, manage screens that display weather, news and advertisements to passengers.
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Riders will pay the same price for a taxi ride as for an Uber X ride, the most common type of ride on the app. As for taxi driver earnings, they will be paid the same as New York City Uber drivers when using the Uber app. This is a formula based on what is known as the utilization rate, which takes into account the proportion of time a driver spends with passengers in his vehicle compared to the time spent doing nothing. and wait for a race.
The metered fare for yellow cabs is calculated differently, meaning taxi drivers can earn less, more, or the same as Uber drivers, depending on the ride. However, taxi drivers will have an advantage over Uber drivers since they will see the expected earnings before a ride, allowing them to decline it if they think it is not worth it. Uber should receive 20% of the revenue generated by taxi rides, as for its own drivers.
If this partnership should allow taxi drivers to increase their number of trips, some remain suspicious of Uber: “ After its business model showed failures to protect drivers from dips in ridership and rising gas prices, Uber is returning to its roots: yellow cabs ironically said Bhairavi Desai, the executive director of the New York City Workers Alliance union.
Covid-19 pushed Uber to change
Uber’s decision is driven by the profound change in dynamics that began in 2020, following the Covid-19 pandemic. During this period, Uber had to face great difficulties with the considerable drop in the number of trips operated by its drivers. Upstream, its meal delivery unit, Uber Eats, has grown significantly and even surpassed its core business; a trend which, if it has weakened, remains valid. As reported ABC Newsgross bookings for Uber’s delivery services reached $13.4 billion in the last quarter of 2021, compared to $11.3 billion from gross bookings for Uber rides.
In many countries, and particularly in France, taxis and VTC have very conflicting relationships. Photography: Dan Gold / Unsplash
If the firm notes an improvement since the end of 2021, it is now struggling to find new drivers, in particular because workers are more interested in delivery. Including New York taxis in its offer therefore seems logical for Uber; in addition to not adding vehicles in a city where traffic is already very busy, this could also allow it to attract new consumers for Uber Eats. Indeed, the company’s head of global mobility, Andrew Macdonald, explained that 35% of people who started using the app for rides went on to use other Uber products, such as its food delivery service.
Uber no longer wants to disrupt the taxi industry, it wants to integrate them into its business
This partnership seems to mark the end of a very turbulent conflict between the taxi industry and Uber. As a reminder, when it arrived on the market, Uber announced that it had the ambition to ” upset » the taxi industry in the United States. Moreover, New York City, Uber’s largest US market, has been particularly affected by this phenomenon. The Verge reports that nearly a thousand taxi drivers have filed for bankruptcy, and at least six drivers have committed suicide.
The war between the company and the taxis is of course not specific to the United States. In France, for example, taxis have gone on strike several times to protest against the American giant, and in several countries around the world, unions have fought and are still fighting against the Uber model, a perfect example of the gig economy. .
” Uber has a long history of partnering with the taxi industry to provide drivers with more ways to earn money and passengers with another transportation option. Our taxi partnerships look different around the world, and we’re excited to team up with taxi software companies CMT and Curb, which will benefit taxi drivers and all New Yorkers alike. said Andrew Macdonald. Indeed, in several countries, Uber has resolved conflicts with taxis by partnering with them.
In Spain, the company has integrated taxis in Madrid, Málaga, Valencia and Barcelona. In Colombia, it has partnered with TaxExpress, which has more than 2,300 active drivers. Half of all Uber taxi rides in Latin America come from the partnership with TaxExpress in Colombia. Uber also has relationships with taxi software and fleet operators in Austria, Germany, Turkey, South Korea and Hong Kong.
Moreover, the New York model should be extended to the rest of the United States, and Uber’s ambitions do not stop there since they are gigantic (even unattainable?); by 2025, the company wants to list all taxis in the world on its app. ” It’s certainly ambitious, but I certainly think it’s possible said Andrew Macdonald.
It remains to be seen whether all taxi drivers will agree to deliver part of their income to Uber…