By Nathalie Voit
Ride-hailing service Uber struck an agreement to list all New York City’s iconic yellow cabs on its platform, The Wall Street Journal first reported on March 24.
The deal, reached with the New York City Taxi and Limousine Commission, is an unexpected turn of events for a company that previously vowed to disrupt the city’s taxi industry.
Although Uber has forged partnerships with taxi operators across several U.S. cities in the past, the New York City alliance was considered off-limits given the tense relations between Uber and NYC’s yellow taxi drivers.
However, the COVID-19 pandemic uprooted normal business practices for the former foes. For Uber, the pandemic created a surging demand for its services, particularly its food and grocery delivery service on Uber Eats. At the same time, gig drivers for Uber were short last year, pushing prices on the app to an all-time high. As of February 2022, prices are still nearly 20% higher than they were in January 2021, according to market research firm YipitData.
Meanwhile, the health crisis dealt serious monetary losses for many taxi drivers in the city as business dried out. Some taxi services in the city do have their own apps, but they are nowhere near as popular as Uber’s in terms of their user base.
The resultant disparity between supply and demand within both industries created a new opportunity to collaborate.
Uber could use the vast supply of drivers working for the New York City Taxi and Limousine Commission, while the commission could benefit substantially from gaining access to Uber’s customer base.
As part of the agreement, the city’s licensed taxi firms will merge their technology with Uber’s. According to Uber, the city’s nearly 14,000 taxi drivers rely on two major software systems to enable their credit card transactions and other services – Creative Mobile Technologies and Curb Mobility. Those apps would be integrated with Uber’s software, The Journal said.
In terms of cost, passengers would pay approximately the same rate per trip, Uber said.
Uber’s stock is up 5.22% over the last five days, according to the New York Stock Exchange.