Uber will list New York City taxis on its ride-hailing app in a deal that promises to end years of rancour between the tech company and drivers of the iconic yellow cabs in the biggest US city.
Under the agreement, taxi drivers who use Creative Mobile Technologies’ system to process customer payments will be featured on Uber’s app.
Uber said drivers using Curb Mobility, a similar system used by cabs, would be also be added to the Uber app at a later date. Between the two dispatching companies, the vast majority of New York City’s cab drivers will now be able to accept Uber trips.
The hope is that doing so will connect them to more passengers as the city recovers from shutdowns caused by the Covid-19 pandemic.
The deal will also give San Francisco-based Uber access to more drivers as it contends with nationwide shortages that have pushed up its prices and forced it to offer costly incentives to drivers who may have left the platform during the pandemic slowdown.
Guy Peterson, Uber’s director of business development, described the pact as beneficial for drivers and customers.
“This is a real win for drivers – no longer do they have to worry about finding a fare during off-peak times or getting a street hail back to Manhattan when in the outer boroughs,” Peterson said in a statement. “And this is a real win for riders who will now have access to thousands of yellow taxis in the Uber app.”
Uber will take a percentage cut of each ride in the same way it siphons off a commission from its own drivers, a spokesperson said, without specifying the precise rate. From its own drivers, Uber’s “take rate” is typically about 20 per cent.
The agreement marks an extraordinary shift for a technology company whose original reason for being was to undermine the traditional taxi industry.
New York City is Uber’s largest market. But it has endured a rocky relationship with the city. The NYC Taxi & Limousine Commission (TLC) in 2018 capped the number of Uber and Lyft vehicles that could operate in the city in response to rising congestion and concerns about drivers’ wages.
The city’s taxi drivers, meanwhile, have long complained that Uber and Lyft have destroyed their livelihoods and left them with crushing debts from licensing medallions that have plummeted in value. Their plight worshiped in the pandemic, which prompted a virtual shutdown of the city and caused demand for all trips to decline.
Taxi drivers using CMT or Curb Mobility will in the coming months be automatically enrolled to receive trip requests from Uber customers. Any taxi driver who does not want to work for Uber can opt to block those trips.
Customers will pay roughly the same for the taxi rides as they would for Uber’s standard “UberX” option, with minimum rates set by the TLC. “Taxi” will appear as a separate menu option on the Uber app, and dispatching – finding and assigning a driver – will be handled by either CMT or Curb.
Unlike Uber’s fleet of gig workers, who see only limited information about a trip before picking up a passenger, taxi drivers taking Uber rides will see the fare and destination up front, and be able to accept or decline without repercussions.
Uber has in recent years opened its app to transport options beyond its own drivers – sometimes in response to regulatory restrictions, or in regions where it was difficult to build a reliable gig worker force.
In the UK, Uber announced in 2020 that it had acquired Autocab, a dispatching service for traditional minicabs, giving it access to customers outside of major cities.
Also in 2020, Uber announced its first public sector partnership with a local minibus service in Marin County, near San Francisco.