Uber partners with New York City yellow taxi cabs

Classic New York yellow taxi cab, or Uber? The two options seem poles apart but will soon join forces.

In an unexpected partnership announced last week, customers in New York will soon be able to request yellow taxi cabs using the Uber app.

Beta testing, which is scheduled for spring in New York, will give around 14,000 cabs access to Uber's customer base. The launch is planned to go public by the summer.

The alliance may seem unusual at first, but after considering the current context, it makes perfect sense; Uber needed more drivers and taxi drivers needed more customers.

As people isolated and locked down during the pandemic, Uber experienced both a shortage of drivers and a surge in demand for their food delivery service, which exceeded their requests for rides. In the final quarter of 2021, gross bookings for deliveries hit US$13.4 billion compared to $11.3 billion for rides.

On the other side, without the usual rush and flow of tourists and people travelling around the city, yellow taxi drivers were left with less work than usual.

By combining forces, the partnership will not only provide cab drivers with larger access to customers but provide the app with more drivers.

New York City hasn't always celebrated being Uber's largest American market. In 2018, New York City placed a temporary cap on new licenses for ride-hailing services and the New York City Workers Alliance, which represents taxi drivers, has been vocally critical of ride-hailing apps.

In a prepared statement, NYCWA's executive director Bhairavi Desai said they would still push for negotiations.

"After its business model has shown the failures to protect drivers from ridership downturns and rising gas prices, Uber is returning to its roots: yellow cabs," Desai said.

The New York City Taxi and Limousine Commission appeared slightly more optimistic about the opportunity for more economic opportunities.

"We are excited about any proposal to more easily connect passengers with taxis and look forward to learning more about this agreement between Uber and the taxi apps and ensuring it complies with TLC rules," said acting commissioner Ryan Wanttaja.

This isn't the first time Uber Technologies Inc. has integrated local taxi drivers into its system. Such partnerships already exist in Spain, Germany, South Korea, Austria, Turkey, Hong Kong and Colombia.

"Uber has a long history of partnering with the taxi industry to provide drivers with more ways to earn and riders with another transportation option," said Uber's senior vice president, Mobility and Business Operations, Andrew Macdonald, in a prepared statement.

"We're excited to team up with taxi software companies CMT and Curb, which will benefit taxi drivers and all New Yorkers."