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FULL CIRCLE (Part 1): Impact Of Adding NYC Yellow Cabs To Uber's App 📱🚖✋
Announcement that NYC yellow cabs will be added to Uber's App is a major moment in the NYC for-hire transport (aka TLC) industry. It raises some obvious and...not so obvious...questions & thoughts
AutoMarketplace NYC covers the for-hire transportation industry and automotive news. Check out AutoMarketplace.com on YouTube ▶️
Before we start, let’s just take a moment to digest the news that NYC yellow cabs will be added to the Uber (& likely Lyft) App. We’ve genuinely come full circle. Back in 2014, Uber Founder & Former CEO Travis Kalanick had this to say about the taxi industry 🚖.
"We're in a political campaign, and the candidate is Uber and the opponent is an asshole named Taxi…Nobody likes him, he’s not a very nice character, people don’t like what he does, but he’s so woven into the political fabric and machinery that lots of people owe him favors…" - Uber Founder & Former CEO Travis Kalanick in 2014
Those times were undoubtedly different and maybe Kalanick wasn’t 100% incorrect, but also not 100% correct either. That being said, it’s a notably different tone than the one struck by current Uber CEO Dara Khosrowshahi this week when the rideshare giant announced that NYC yellow cabs would be added to the Uber App.
Back in October we published the below 👇
Although we may have thought it could happen, speculation and actual announcement are two different things. We were surprised, as many of you were, when Uber officially announced that, within a few months, NYC yellow cabs (cabs with NYC Taxi Medallions) could be ‘e-hailed’ from the Uber App. Specifically, Uber has entered into a deal with Curb Mobility and CMT (Creative Mobile Technologies). Curb and CMT essentially operate the entertainment and payment systems in most NYC yellow and green taxis. According to Curb CEO Amos Tamam, Curb has more than 2 million users in NYC with average daily ridership of 15,000 trips. CMT also operates the ARRO e-hailing app. It stands to reason, Lyft should be announcing a similar partnership with the companies soon (unless we’re missing something).
“On the one hand, Uber and yellow cab seem completely like water and oil…On the other hand, when you go hail a cab or go to your smartphone to get an Uber, it will be the same experience as it was before. So, it’s kind of like a big change and the same thing all at once.” - Bruce Schaller, former city transportation official
For anyone who’s been in the TLC industry for a minute, we all know there is still a lot to be said and a lot to be seen. In this article (our first ‘Two Part’-er!), we discuss some immediate thoughts we had as we continue to think through the different impacts adding yellow cabs to the rideshare apps has on the NYC for-hire transportation landscape. As always, let us know your thoughts by commenting below or emailing us at info@automarketplace.com!
📱 How Will Yellow Cabs Appear In The App(s), Impact on UberX & 📉 Death of Surge?
I think one of the most important aspects of analyzing how this impacts existing NYC Uber (and likely Lyft) drivers is how the yellow taxi option appears in the Apps 🤔. For example, will there be a separate ‘UberTaxi’ option 🚕 with a different and/or cheaper price or will the ‘UberX’ option become a dual ‘UberX / Taxi’ 🚗 🚕 🚙 option. It may seem inconsequential, but we think it's a significant point from a consumer trip demand perspective - both related to whether it's cheaper to e-hail a yellow cab or if UberX / Taxi becomes the standard trip option for customers. If ‘UberX’ becomes ‘UberX / Taxi’, it will essentially be the equivalent of adding over 10,000 to 20,000+ new drivers to the Uber platform.
Adding so many drivers/vehicles to the NYC UberX (Lyft) platform will, in our mind, kill surge pricing (at least for a while). It may even bring back the “Planner” sooner rather than later, as driver/vehicle supply outstrips the trip demand dynamics the Apps need to abide by, in order to satisfy driver minimum pay requirements. In other words, NYC Uber/Lyft driver waiting lists might be reinstated.
❓ Wait…How are you calculating over 10,000 to 20,000+ new drivers!❓
You have to remember many yellow cabs 🚕 operate differently in NYC versus “app-native” rideshare vehicles (aka TLC-plated cars). NYC yellow cabs often operate on 12 hour, two driver shifts 🙂🙂, while most NYC cars used for Uber/Lyft are operated by a single shift 🙂 owner-operator or lessee, who’s renting their vehicle 24/7. So, adding one active yellow cab could actually be the equivalent of adding two "Uber cars" if you will. It's also noteworthy that while there are ~13,580 yellow taxi medallion cars in existence, only ~6,600 are currently active. That should change over time, but it's an important point to note.
✋Street “Hand” Hails & 💵 Cash Trips
Related to the point above, it’s important to note that there is an underlying demand for street “hand” ✋ hails that isn’t going to zero. Therefore, all yellow cab supply is not going to be “online” for the Apps to access. If we take Curb’s disclosure (i.e., largest NYC yellow taxi app) that ~15,000 yellow cab trips per day are ‘e-hailed’ on its App, it implies that over 70% of NYC yellow cab trips are still "street hailed".
The exact data on what percent of yellow cab trips are paid in cash 💵 is hard to confirm. It is well known though that Uber & Lyft don’t accept cash as a form of payment. While it’s highly likely an individual who is currently using cash to pay for cab trips is not currently using for-hire transport apps (there would be no way for them to pay), it’s worth noting that yellow cabs provide the ability for customers to pay in CASH as well as card / other digital means (i.e., Apple Wallet). Another reason yellow cab supply available to the Apps could be limited.
Since this is such a huge topic, we'll leave it here for now. In Part 2 (to be published tomorrow) we’ll go over other impacts. We list a preview of subject headlines we plan to discuss.
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👇👇👇👇👇👇👇👇
🤔 One App, Two Rules,❌Can A Yellow Cab Driver Be Deactivated?
🚕Yellow Cabs Seek To Reclaim Manhattan
🥇Impact on Medallion Values
🚫 Impact on TLC “Plate Cap”
🌎 Groundwork for Universal TLC App?
Wall Street Journal Podcast Interview With Reporter Who Broke Story on NYC Yellow Cabs Being Added to Uber App
AutoMarketplace NYC covers the for-hire transportation industry and automotive news. Check out AutoMarketplace.com on YouTube ▶️