An unlikely alliance is forming in New York City. As The Wall Street Journal reports, Uber has reached a deal to list the city’s taxis on its app if drivers opt in—a first in the United States. In return, Uber will also appear on apps used by taxis in the city.
According to the report, Uber has been struggling with driver shortages and fare rises, which could explain the move of teaming up with the conventional taxi fleet that has long been considered an enemy of the ride-hailing model. The agreement is especially surprising since New York City is a highly competitive and lucrative market for taxis and ride-shares—at least prior to the pandemic—which has caused a fair share of conflict over the years.
This chart shows the average daily trips taken in New York City with selected taxi/ride-hailing … [+]
Statista
A look at the development of average daily taxi and ride-hailing rides in New York City, supplied by the NYC Taxi and Limousine Commission, shows which struggles might have convinced Uber as well as traditional taxi companies to enter into their new union. The number of all rides in New York City plunged at the onset of the Covid-19 pandemic and neither taxis nor ride-hailing have fully recovered yet.
As of December of 2021, the latest month with complete data available, just over 100,000 average daily taxi rides and around 520,000 daily average rides on Uber and Lyft were registered in New York City. In February 2020, those numbers had still been around 230,000 and 730,000, respectively.
Collaboration instead of competition?
The pandemic has therefore dealt a considerable blow to the business of both taxis and ride-hailing providers. While ride-share drivers more easily entered other industries among the U.S. labor crunch, taxi drivers and operators were more likely to stick around but are acutely looking to make up for pandemic losses, according to The Wall Street Journal. This twist of events causes taxi drivers of all people to be exactly the personnel that Uber is looking for at the present moment. But Uber wouldn’t be Uber if it didn’t use the opportunity to go all out on a new strategy. As part of the course change, Uber’s global mobility chief Andrew Macdonald said that his company wanted to list every taxi in the world on its app by 2025.
While Uber set out fiercely competing with taxis, it has also recognized the benefits of teaming up with them to bring customers into its fold of ever-expanding services like Uber Eats—a strategy that started in overseas markets where push-back from authorities against Uber’s business model has been especially strong. In the pandemic, when food delivery became the company’s primary growth market and ride-hailing struggled, the collaboration approach seems to have swept over into the U.S. as well.
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Charted by Statista
