Uber to Add New York City Cabs to its Ride-Hailing App

author: FutureCar Staff    

Ride-hailing giant Uber Technologies is facing a growing shortage of drivers made worse by the sudden spike in gas prices as a result of Russia's invasion of Ukraine and the global volatility that followed. But Uber now plans to add yellow cabs to its ride-hailing app, which won't help with gas prices, but will help address its ongoing driver shortages.

In New York City, which is one of Uber's biggest U.S. markets, the ride-hailing company says its will add the city's yellow cabs to its app. The plans were first reported by the Wall Street Journal. The extra vehicles will help Uber deal with its driver shortages hampering its core transportation business.

Uber will work with taxi software companies Creative Mobile Technologies (CMT) and Curb, with the goal of expanding the collaboration U.S.-wide.

Yellow taxi drivers on the CMT platform, which includes the taxi app Arro, will gain access to Uber's massive customer base, yielding a higher number of trips and expanded revenue opportunities.

Uber and CMT began working together in 2021 after the taxi technology company began doing business with Uber's out-of-home advertising company, Uber OOH, CMT installs lighted advertising billboards on the roof of taxi vehicles. CMT is currently servicing around 3,500 vehicle taxi top contracts for Uber OOH. 

This initial partnership grew into an expanded business relationship which paved the way for the NYC taxi industry and Uber to reevaluate their long-standing rivalry and instead focus on the New York residents that rely on both transportation services.

The Uber-CMT deal will start this spring and roll out to the general public by summer. The deal was designed by CMT and Uber to be a seamless experience for both the passenger and driver. 

"We are especially grateful to the Taxi and Limousine Commission for smartly creating the E-hail and Flex-Fare programs which recognized the changing face of the rideshare, for-hire-vehicle and taxi industries a few years ago," said said Ron Sherman, Chairman of Creative Mobile Technologies and a pioneer in the taxi industry. "We look forward to a new and more prosperous chapter where passengers and drivers are empowered with choice and which will lead to a sustainable future for all our industries."

Anyone with the Uber app will have access to thousands of yellow taxis that operate on the CMT/Arro platform. Taxi drivers will see Uber-originated fares on their driver monitors that they currently use to accept fares from the Arro taxi app. 

In the past, Uber fought with city transportation boards in cities like New York for the right to do business, which has also decimated the traditional taxi industry model of selling a set number of expensive medallions to operate a cab. 

Uber says it plans to include every NYC taxi on its Uber app by 2025. If all of New York City's licensed cab drivers participate, the company could add over 13,000 new cabs to its app, giving them the opportunity to collect more fares, which can also benefit Uber customers by reducing wait times and providing more choices.

"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," said Guy Peterson, Director of Business Development for Uber. "And this is a real win for riders who will now have access to thousands of yellow taxis in the Uber app."

Two weeks ago Uber announced it was raising fares to help drivers with rising fuel costs. Starting on March 16, consumers pay a surcharge of either $0.45 or $0.55 on each Uber trip and either $0.35 or $0.45 on each Uber Eats order, depending on their location. Uber said 100% of that money is going directly to drivers.

The surcharges are based on the average trip distance and the increase in gas prices in each state. The extra fees will be levied on customers for at least the next 60 days.

Although Uber once fought to take out the antiquated taxi industry, the company now sees it as another growth oppurtunity as technology continues to transform the industry. 

During the company's most recent investor day in February, Uber said its views taxis as a major business opportunity, calling it a "highly fragmented" $120 billion industry with 20 million active vehicles. But these 20 million vehicles are more than five times bigger than Uber's own driver partner fleets, and up until now, remained a largely untapped resource for Uber.

FutureCar Staff