Uber has struck a deal that will soon allow folks in New York City to hail yellow cabs through its app. The city's 14,000 taxi drivers will be able to accept fares from Uber users through apps like Curb and Arro.
This is Uber's first citywide partnership of this nature in the US. It expects the integrations to be up and running this spring. Passengers will pay around the same as they would for Uber X rides, the company told The Wall Street Journal, with Uber and its partners taking a cut of the fare. Taxi drivers will be able to see their estimated earnings before deciding whether to accept a trip.
The move could help remedy Uber's shortage of drivers and tackle the surge pricing problem while helping cab drivers find more fares. It could be an uneasy alliance, however, given that the taxi industry has opposed ride-sharing apps in the past.
"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 biz model that underpays drivers, fires them at will & guts full-time work. So it's time to negotiate," said New York Taxi Workers Alliance executive director Bhairavi Desai. "If Uber and Curb 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."
Update 12:30PM ET: This post has been updated with quotes from the New York Taxi Workers Alliance. The full statement is below.
Statement from NYTWA Executive Director Bhairavi Desai:
On Uber – Yellow Cab Deal
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 biz model that underpays drivers, fires them at will & guts full-time work. So it's time to negotiate.
After its business model has shown the failures to protect drivers from ridership downturns and rising gas prices, Uber is returning to its roots: yellow cabs.
First, this should settle once and for all the question of maintaining the vehicle cap.
Second, the fare structure that is not enough for Uber drivers is also not going to be enough for yellow cab drivers who have higher expenses such as the medallion payment and higher car costs as a new one must be hacked up every six years. To start with:
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Uber – and Lyft and the taxi meter – need to implement a fuel surcharge immediately in NYC for all drivers.
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Yellow cab drivers must be paid the metered rate and after 10 long years without a raise – that meter needs to go up.
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The TLC-regulated App driver payment rates used to pay drivers under this program need to be adjusted to the increase in operating expenses since they were set 4 years ago. Drivers need to be paid whichever is higher – either 85% of what the passenger pays or 100% of the TLC-regulated rates.
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Uber and yellow cab drivers need Just Cause protection so drivers can not be fired without warning or reason as the means for the company to control supply.
Here are some sample fares comparing what drivers would earn on the meter vs. under the proposed rates. Yellow cab drivers would be short-changed on average 15%.
Trip #1 (Manhattan short trip, rush hour)
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Drop+Evening Rush hour (Taxi $3.50)
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2 miles long (Taxi: $5.00; App: $2.32)
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12 minutes long (App: $6.35)
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4 minutes slow/stopped (Taxi: $2.00)
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Taxi fare (surcharges, taxes excluded): $ 10.50
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App-based Driver Pay: $8.67
Trip #2: Manhattan (East Side) to JFK Trip, non-rush hour
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Taxi Fare: $52
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17 miles (App: $19.78)
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42 minutes (App: $22.22)
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App-based Driver Pay: $42
Trip #3 Manhattan (West Village) to LGA, Night-time
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Drop + Night Surcharge ($3.00)
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12.8 miles long (Taxi: $32.00; App: $13.93)
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35 minutes long (App: $18.52)
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5 minutes slow/stopped: ($2.50)
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Taxi Fare (surcharges, taxes excluded): $37.50
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App-based Driver Pay: $32.45
If Uber and Curb 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.