Uber's inevitable deal with NYC taxis
Uber has long battled with the yellow cab industry, but today's landmark detente in New York City shouldn't come as a surprise.
Why it matters: The agreement, between the biggest rideshare operator in the country and adversaries in one of its most lucrative markets, was an inevitability. And while the deal may not be entirely win-win, it’s undoubtedly a need-need.
- COVID hurt nearly all out-of-home businesses, including Uber’s and the taxi industry — which was already hurt by ride-sharing apps.
- During the pandemic, not only did demand for rides fall, the supply of drivers did too and this partnership ensures a greater distribution of drivers and riders across the New York City area.
The big picture: Uber’s dreams have always involved owning the ability to move anyone and anything — ambitions backed by money and scale that dwarfed the fight that global taxi groups have put up for years.
- Part of that fight included launching apps that will now work with Uber.
Details: Uber’s app will connect on the backend with Curb and Arro which already host NYC taxis.
- Starting in the spring, taxi drivers on those apps will get access to Uber ride requests while Uber app users will get access to taxis.
- The deal increases Uber's available vehicles in NYC by about 11.4%, John Blackledge, senior research analyst at Cowen, wrote in a note today.
- Uber, as well as its taxi partners, will get a cut of taxi driver fares, terms for which the companies did not specify. Currently, Uber's average global take rate was 20%.
What to watch: Uber wants to integrate itself with every taxi in the world, Andrew Macdonald, Uber’s global mobility chief, told the WSJ.
- The company’s already struck partnerships in Colombia, Germany, Austria and Hong Kong.