Uber is approaching taxi companies

When Uber launched its hail service, the company was more of a pariah than a partner in the taxi industry. About 12 years later, it seems to be the last one.

Uber announced a multi-year partnership with Los Angeles Yellow Cab and its five partner taxi fleets in Southern California on Tuesday. As part of the agreement, taxi drivers will have access to Uber ride referrals in Los Angeles, Orange and San Diego counties. And the partnership is extensive; six taxi fleets with around 1,200 vehicles are covered by the agreement.

This means that a passenger using the Uber app can ask a taxi driver to pick him up. The price is still indicated in advance, and passengers have the opportunity to refuse departure by taxi.

The partnership comes a year after Uber announced pilot programs with taxi companies in New York and San Francisco. The results were positive enough for Uber to expand the taxi partnership to other markets.

The question that many may have is why? Or what has changed? It’s complicated, but as with most things, the focus is on money.

William Rouse, CEO of Taxi Operations, called it a win-win situation for drivers and passengers, noting that if the recovery from the pandemic continues, it will have a positive impact on driver owners.

“Drivers no longer have to worry about finding an off-peak fare or getting a call back to the city when they are in the suburbs,” he said.

The comments are in sharp contrast to the barbs and litigation between Uber and the taxi industry in 2012.

Uber has set itself the task of revolutionizing the taxi industry, and in many ways. The value of medallions, a transferable license used in several major U.S. cities that allows a taxi driver to operate, has eroded. As a result, companies that provided loans to taxi drivers seeking access to a medallion were practically eliminated – many of them were considered predatory.

And Uber and other hailing companies like Lyft have successfully gained market share for taxis until they have become a dominant service in many cities. But Uber needs to keep growing; and adding more drivers is the key to that plan. With this partnership with the taxi fleet, the private transport company’s technology now goes far beyond its application and permeates the taxi ecosystem. An Uber spokesman said: “Our ambitions are to extend our technology to everyone and make Uber rides available to all taxi drivers.”

Taxi drivers also benefited from the transfer of new trips, according to an analysis by the San Francisco Municipal Transportation Authority.

The agency approved an amendment in April 2022 that allowed taxi customers to book a taxi ride through third-party e-taxi apps like Uber and pay a flat rate in advance. This program was launched in November 2022. The agency noted that from the first to the second quarter of 2023, the share increased by 37% to 378 taxi drivers.

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Drivers who took rides through the Uber app earned 23.8 percent more monthly fare revenue than drivers who did not take such rides, the agency said in its analysis. These taxi drivers earned an average of $ 1,430 per month on these trips, and this, according to the data, increased by 60 percent from the first quarter ($ 1,093) to the second quarter ($ 1,767).

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