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⚫ NYC UberX = 🚖 NYC Taxi
Having medallion yellow taxis as a separate option on the Uber app is *VERY* different than dispatching yellow cabs to UberX customers
NYC UberX customers might get a yellow medallion cab, instead of a TLC-plated “black car”, when requesting a ride
Taximeter, as of now, would NOT apply to Uber trips completed in yellow cabs. NYTWA’s Desai is pushing City Council for a rule change
Congestion pricing politics, where yellow cabs might be exempt, could be reason Uber is pursuing this strategy
Yellow cabs would be directly competing with other FHVs for Uber dispatched trips
In an amNY exclusive that many might incorrectly dismiss as old news, Uber announced it’s beginning to dispatch yellow medallion cabs to some of its NYC customers.
Yes, Uber has previously made announcements about including an “UberTaxi” option, but this announcement is meaningfully different. How so? In this situation, when some NYC Uber customers request a standard UberX ride, they may get a yellow cab instead! That is very different than having a separate UberTaxi option.
“Riders in NYC may be matched with a taxi for an even faster pickup, and, down the line, if New York decides it would rather see passengers in yellow taxis than black Toyotas, the value of this option will shift from offering riders the fastest available car, to the cheapest”
- Josh Gold, Uber’s senior director of public policy
We’ve actually written about this technical, but important difference, when Uber announced a collaboration with yellow cabs last year.
“At first glance, we find the separated presentation in the App (“Taxi” vs. “UberX”) interesting vs. just grouping both options as “UberX”. Given both are about the same price, how that might impact customer preferences will be interesting to track (assuming situations where wait times are similar). For example, will yellow cabs steal “normal” UberX share and/or will it cause street hand hails to decline.”
- AutoMarketplace, September 7, 2022
Taximeter Dead?
As amNY reports, the program is the result of Uber’s partnership with taxi “e-hail” apps Curb and Arro. Under TLC’s “Flexible Fare” Pilot, taxi customers can see the fare upfront before requesting a trip, similar to how Uber and Lyft function. Essentially, taximeter rates go out the door and yellow cab drivers are paid based on Uber’s standard pricing that follows the TLC Minimum Pay Rules (i.e., per mile, per minute rates).
“We are excited about any proposal to more easily connect passengers with taxis and will continue to monitor this partnership between Uber and the taxi apps and ensuring it complies with TLC rules”
- James Parziale, TLC spokesperson
Bhairavi Desai, the head of the influential taxi medallion driver advocacy group New York Taxi Workers Alliance (NYTWA), is not happy. She argues yellow cab drivers stand to make less by accepting Uber requests and is advocating for Uber to follow taximeter rates.
NYTWA is currently supporting a City Council bill sponsored by Queens (District 25, Jackson Heights & Elmhurst) councilmember Shekar Krishnan. The bill would require apps like Uber to pay yellow cab drivers the same or more for e-hails as they would get for a metered fare.
“Regardless of how much a rider is charged, the driver is paid well below the metered rate…So yellow cab drivers right now lose money on e-hail trips and most drivers do not take them.”
- Bhairavi Desai, NYTWA
Thoughts
This announcement is actually a much bigger deal than last year’s announcement about Uber and NYC yellow cabs collaborating (i.e., adding a separate taxi option). Ultimately, if UberX customers do not care whether a yellow cab or other “black car” picks them up, then medallion taxi drivers will likely engage Uber more, as the company has a very dominant trip market share (a/k/a lots of trips to dispatch).
Uber dispatched trips could also (1) hopefully get thousands of inactive taxi medallions working again (+ working 🚕🚕 double shifts) and (2) help the industry better understand what the underlying demand is for “hand” 👋 (“street”) hails is. In other words what is the “run rate” trip demand generated from people waving a taxi down in NYC (i.e, 5%, 10%, 15%, 20% of trip share?) Taxi medallion values will also likely benefit.
That being said, current Uber drivers are not going to be happy about their trips being dispatched to yellow cabs (i.e., less trips for them). Also, we wish Uber good luck when trying to “deactivate” ❌ a yellow cab driver from its app!
Finally, ongoing congestion pricing politics might be having an interesting influence. Ira Goldstein, Executive Director of the New York Black Car Fund, wrote about this dynamic in this month’s issue of the Black Car News.
“With regard to taxis and FHVs, while I’m glad that a per-ride surcharge seems likely to be implemented, I am very concerned about the exemption being considered for yellow cabs. If yellows are granted an exemption, while FHVs aren’t, this would be a clear case of government picking winners and losers.”
- Ira Goldstein, Executive Director of the New York Black Car Fund
“If the TMRB opts to exempt taxis but not other for-hire vehicles, as Uber suspects it might, a cab would unequivocally become a cheaper option to enter the central business district than an Uber.”
- amNY
As always, let us know your thoughts in the comments section below or by emailing us at info@automarketplace.com.
AutoMarketplace NYC covers the for-hire transportation industry and automotive news. Check out AutoMarketplace on YouTube ▶️
An update on this, I believe the tips are in fact being deposited in the new paypal system which replaced the Commercial/Government card WAV /TIF payment system. It's confusing to verify because the deposits are not itemized.
I confirmed that passengers can tip Yellows through the app. A passenger told me she tipped $6.00. I got $0.00. There's no way this is a 'mistake,' Uber set up the payment system through the T-PEP and everything else works fine. This is a major story IMO. I have contacted the TLC and NYTWA. If you want to cover it I think it would be a very worthwhile story. Reaching out to drivers would be very helpful as well.