Uber will feature NYC taxi cabs in its app under groundbreaking new deal

Photo by Spencer Platt/Getty Images

New York City's famed yellow cabs will be included in the app of the ride-sharing company. The agreement will go into effect later this spring and will mean that roughly 14,000 taxis will be able to receive trip requests from customers. The news was first reported by The Wall Street Journal.

Curb Mobility and Creative Mobile Technologies are licensed technology providers in the city. Yellow cabs, which can be hailed using smartphone apps owned by the two companies, will gain access to Uber's much larger customer base, which could translate into higher trip volumes and more money for struggling cab drivers.

New York City has been a battleground for the taxi industry for a long time. A decade ago, the company's arrival in the city caused a decline in the yellow cab business. Taxi owners argued that the platform was in violation of regulations, but have watched as riders and drivers flock to it. The price of liming in New York and elsewhere plummeted, and the lenders who financed the taxi industry went out of business. Flywheel, Sidecar, GetTaxi, Hailo, and Taxi Magic are some of the apps that tried to duplicate the success of Uber.

The impact in New York City was severe. At least six drivers have died from suicide in the last year. Efforts to regulate the companies have resulted in a shortage of drivers.

The new agreement may be easing tensions. Curb Mobility and CMT will allow riders to book trips in taxis that are connected to either Curb or Arro, two of their own apps. The yellow and green taxis in New York City are operated by two companies.

The company said that riders will pay the same fare for taxi rides as they would for anuber X trip. In New York City, drivers for the ride-sharing service are paid based on how much time they spend with passengers in their cars compared to how long they wait for a fare. Taxi drivers who accept customers will be paid the same rate.

The yellow-cab fare is calculated under a different rubric, meaning cab drivers may earn less, more, or the same, depending on the trip. Taxi drivers can decline rides if they don't think it's worth it, because they will see expected earnings before a trip. Taxi drivers will get a cut of the fares they earn from the platform. According to its most recent earnings report, the average global tax rate is 20 percent.

Taxi drivers will not be eligible for the recently announced fuel surcharge as the for-hire vehicle minimum reflects the cost of living increase.

The yellow cab companies are portraying the deal as a way to revive the city.

As a driver-first company, we will remain committed to our taxi drivers and fleets as we work with Uber to generate enhanced stability and financial wellbeing for members of the taxi industry.

Kalanick once described his primary competitor as an asshole named Taxi, now the company sees taxis as an important part of its future. In countries around the world, including Spain, Columbia, Turkey, Germany, Austria, South Korea, and Hong Kong, there is a partnership with the taxi industry. The company wants to include every taxi in the world on its app.

In a statement, Andrew Macdonald said that the company has a long history of partnering with the taxi industry to provide drivers with more ways to earn and riders with another transportation option.