Big questions loom on partnership with Uber, yellow cabs

New York City residents will soon be able to order a yellow cab through Uber.

Beginning this summer, Uber will begin listing all taxis on its app, a spokesperson for the company confirmed, following an agreement reached with the city’s Taxi & Limousine Commission — but yellow cab drivers still have a lot of questions about the deal.

The partnership between two bitter rivals, first reported by the Wall Street Journal, comes roughly a decade after the arrival of ride-sharing apps helped decimate New York City’s taxi industry, pushing thousands of traditional cab drivers into poverty. It also comes as ride-sharing apps are now facing their own sustainability questions — a shortage of drivers has spiked prices by nearly 80% since the start of the pandemic.

The unlikely integration could help direct thousands of fares toward cab drivers, while alleviating supply problems faced by Uber. But advocates for taxi drivers raised immediate concerns, citing fears of pay and exploitation by the technology company.

“Is it good news or bad news? That all depends on the payment structure,” Bhairavi Desai, executive director of the New York Taxi Workers Alliance, said in an interview Thursday. “Right now we don’t see a payment structure that’s made for drivers’ advantage.”

Under the agreement, the city’s existing yellow cab apps, Curb Mobility and Creative Mobile Technologies, will integrate with Uber’s software. Riders will have the option to select a yellow cab on the app, which will cost roughly the same as a standard Uber, according to a company spokesperson.

Cab drivers who accept a ride through Uber’s app will be paid under the same formula received by Uber drivers under a minimum time and distance rate set by the TLC. The formula differs from metered taxi fares, and may be higher or lower depending on a number of factors.

But Desai said there are a lot of issues that still need to be ironed out. She told Gothamist that yellow cab drivers have higher expenses than those in the for-hire vehicle sector and should not be subject to Uber’s payment formula. She also noted that for-hire vehicle drivers also deal with sudden “deactivations” when the company faces an excess of supply – something that cab drivers should be protected from if they partner with the app.

Freddi Goldstein, an Uber spokesperson, noted that drivers do not have to accept Uber trips.

“They will see upfront how much each trip will pay (and therefore whether it’s more or less than the meter) and can choose accordingly,” she said.

She also noted that for-hire vehicle rates go up annually, most recently increasing by 5.3% a few weeks ago.

Inquiries to the TLC were not immediately returned Thursday morning.

The alliance comes as the taxi industry in New York City has shown cautious signs of bouncing back. Uber, meanwhile, has increasingly teamed up with other taxi companies internationally in an effort to meet demand.

“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,” Andrew Macdonald, Uber’s global mobility chief, said in an emailed statement.