How the Disruptors Are Getting Disrupted
After years of fighting and bitterness between Uber and New York taxi owners and operators, the two are joining forces.
This is seriously wild. Uber, the “Uber” of ride-sharing apps, is turning to the very industry it disrupted to help fill the demand for drivers. The entire Uber story arc is based on its fight to eliminate the taxi-cab industry.
And now, they’re cutting deals with the taxi drivers of New York City, the most active battleground in the aforementioned fight, all because they can’t get enough drivers to meet demand.
What Uber’s Move Means for You?
If Uber’s plan works, fares should go down. As taxi drivers begin accepting Uber rides, the availability will go up, and surge pricing will be rarer.
As for pay, taxi drivers in New York City will be paid the Uber rate for rides accepted through the Uber app. But unlike other drivers, taxi drivers will be able to see an estimated fare before accepting the ride.
Where Are All the Uber Drivers?
Rideshare apps are experiencing a massive lack of drivers, making it feel like we’re always paying for surge pricing. The lack of drivers can be explained by a truly perfect storm, but in one word, COVID. Here are the three factors that created the storm:
PANDEMIC – When people sheltered at home in 2020, rides on the app fell off a cliff.
DELIVERY – Simultaneously, food and grocery delivery demand are skyrocketing. Drivers found themselves making more money and driving fewer miles delivering food. And groceries typically don’t barf in the backseat on the way home from the bar. Dain Evans summed it up nicely for CSNBC:
“It was a bit like a gold rush for drivers who were not able to deliver passengers during the pandemic; while Uber’s ride-sharing revenue decreased 43% between 2019 and 2020, its delivery revenue increased 179%, according to its 2020 annual earnings report.”
BAD BUSINESS – To top it all off, Uber had been notorious for undercutting its drivers ever since the startup’s new-car smell wore off. As soon as the driver’s found a better way to make money, they jumped ship and didn’t think twice.
Uber Appears to Be In It for the Long Haul
This move looks like more than just a bandaid for Uber. To list taxis on its app, Uber is integrating its tech with Curb Mobility and Creative Mobile Technologies.
They’ve already worked with the Taxi industry internationally, including in countries in Europe, East Asia, and South America. It looks like integrating their competition is the future, and honestly, the best way to save Uber’s business.
Lyft Is Joining the Party, Sort Of
Meanwhile, in Nashville, Lyft is integrating Spin’s electric scooters into its app. This move is weird for completely different reasons. It seems less like they’re offering a solution and more like they’re saying, “We’re kind of busy, why don’t you just walk.”
Our Take on Uber’s Move?
Honestly, if Carmax or Cavana started buying cars on Carmigo, we’d be stoked. Inclusivity creates more room in the marketplace and usually brings the customer added value too.