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Uber will feature NYC taxi cabs in its app under groundbreaking new deal

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Is the blood feud easing?

New York City Taxi Drivers Go On Hunger Strike Over Medallion Debt Photo by Spencer Platt/Getty Images

Uber, longtime foe of the taxi industry, has made a deal to integrate New York City’s iconic yellow cabs in its app. The agreement, which is set to go into effect later this spring, means that roughly 14,000 taxis will be able to receive trip requests from Uber customers. (The news was first reported by The Wall Street Journal.)

As part of the deal, the city’s licensed technology providers, Curb Mobility and Creative Mobile Technologies, will integrate their software with Uber. Yellow cabs, which can be hailed using smartphone apps owned by the two companies, will gain access to Uber’s much larger customer base, which could translate into higher trip volumes and more money for beleaguered cab drivers.

New York City has been a battlefield for Uber’s war with the taxi industry for years. The company’s arrival in the city a decade ago triggered a slow-motion decline of the yellow cab business. Taxi owners argued that Uber flouted regulations but have watched helplessly as riders, and drivers, flock to the platform. Medallion prices in New York and elsewhere plummeted, and lenders who made a living by financing the taxi industry went out of business. Meanwhile, the taxi industry has tried its hand at replicating Uber’s success: Flywheel, Sidecar, GetTaxi, Hailo, and Taxi Magic are some of the apps that tried — and mostly failed — to match Uber’s model.

The impact in New York City was particularly acute. Nearly a thousand drivers have filed for bankruptcy, with at least six drivers dying from suicide. Meanwhile, efforts to regulate Uber and Lyft have resulted in a driver shortage, sending fare prices soaring.

Those tensions may be easing under this new agreement. Riders will be able to book trips in taxis that are connected to either Curb or Arro, the two smartphone apps that are owned by Curb Mobility and CMT. Together, those two companies operate the entertainment and payment systems in all of New York City’s yellow and green taxis.

Riders will pay the same fare for taxi rides as they would for an Uber X trip, the company said. Uber drivers in New York City are paid under a formula that uses a so-called utilization rate, which accounts for the share of time a driver spends with passengers in their vehicles compared to time spent idle and waiting for a fare. Taxi drivers who accept Uber customers will be paid under the same rate.

The yellow-cab metered fare is calculated under a different rubric, meaning cab drivers may earn less, more, or the same as Uber drivers, depending on the trip. Unlike Uber drivers, taxi drivers will see expected earnings before a trip, meaning they can decline rides if they don’t think it’s worth it. Uber will receive a cut of the fares that taxi drivers earn from its platform. (Uber’s average global tax rate is 20 percent, as per its most recent earnings report.)

Taxi drivers will not be eligible for the recently announced fuel surcharge, as the for-hire vehicle minimum reflects the 5.3 percent cost of living increase.

The yellow cab companies are portraying the deal as one meant to reinvigorate a city exhausted by pandemic restrictions. “New York City is back!” Ron Sherman, chair of CMT, said in a statement. “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.”

“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,” said Amos Tamam, CEO of Curb, in a statement.

Uber co-founder and former CEO Travis Kalanick once portrayed his primary competitor as “an asshole named Taxi.” Now, the company sees taxis as integral to its future. Uber has partnered with the taxi industry in countries around the world, including Spain, Columbia, Turkey, Germany, Austria, South Korea, and Hong Kong. And the company hopes to eventually include every taxi in the world on its app.

“Uber has a long history of partnering with the taxi industry to provide drivers with more ways to earn and riders with another transportation option,” said Andrew Macdonald, SVP, mobility and business operations, in a statement. “Our partnerships with taxis 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.”