Yellow taxis, gutted by the rise of rideshare app Uber, are finally getting picked up, as the behemoth tech company reaches a deal with cab companies to combine forces. Taxi-hailing software Arro by Creative Mobile Technologies and Curb Mobility are being folded into the Uber platform, allowing the app to list the city’s approximately 14,000 taxis through their service.
Starting this spring through beta-testing, taxi rides hailed through Uber’s services will cost the same as an Uber X ride (prices of which in recent years have increased as much as 67 percent), while it appears taxis hailed “the old fashioned way” will remain priced through the longstanding metered fare. Unlike their counterparts at Uber, yellow cab drivers will be able to see expected earnings before a trip, allowing them to decline rides that don’t meet their financial needs. For rides booked through the shared platform, Uber will receive a cut of fares earned by taxi drivers. According to the Wall Street Journal, both companies declined to specify the terms, but Uber’s average global cut for rides in the fourth quarter of 2021 was 20 percent.
Said Curb CEO Amos Tamam in a statement: “Our partnership with Uber is a natural step forward in the expansion of ground mobility and, as a driver-first company, we will remain committed to our taxi drivers and fleets as we work with Uber to generate enhanced stability and financial wellness for members of the taxi industry.”
“New York City is back! As businesses bring their employees back, as tourists flock to New York City again and as New Yorkers start going out and replenishing our local economy after a devastating pandemic, yellow taxis and Uber are bringing the best our industries have to offer to help this city get back on its feet,” said,” said Ron Sherman, Chairman of Creative Mobile Technologies and a pioneer in the taxi industry in a statement.
The merger comes at a crucial crossroads for yellow taxi drivers, who in recent years have suffered significant losses from the rise of rideshare apps like Uber and Lyft, as well as outsized medallion costs. Several taxi and black-car drivers have committed suicide over the financial burden of a taxi medallion and fees, which, as in the case of deceased driver Kenny Chow, can total as much as $750,000. While ridership has increased from the early days of the pandemic, the initial dip in business, surging gas prices, and a lack of Midtown business traffic have left taxi operators out of pocket.
While the news was positively received by Uber and Taxi and Limousine Commission executives, some drivers question the motives and terms of the deal. Uber stands to gain a substantial financial boon from the merger, as in addition to its proposed cut of taxi earnings, the app could acquire new users to its other services — 35 percent of passengers who booked rides through the app went on to use other products like Uber Eats.
The New York Taxi Workers union reacted passionately to the news, arguing for further negotiation to benefit drivers and stating in a series of tweets: “The companies that tore up this industry need this more than the drivers do. Drivers can hold out on 1 – 2 more fares but cannot settle for a business model that underpays drivers, fires them at will and guts full-time work. So it’s time to negotiate. If Uber, Curb, Arro think they can slide in with a payment structure that’s broken for Uber drivers and piece it together on the backs of yellow cab drivers, they’re in for a sobering surprise. Neither company will grow ridership without working out terms that work for drivers. We know who’s in the driver’s seat. And spoiler alert, it’s not a venture capitalist.”