Uber vs. Yellow Cabs

Written by Veena Murali

Most people imagine that the quickest way to get somewhere is to have a car pick you up and drop you off at whatever location, on-demand. This is the basic idea behind ride-hailing services like Uber and Lyft. New York is one of the greatest components of profit for these companies, with more than 100,000 for-hire vehicles circulating at a time. However, New York City issued a cap on the number of for-hire vehicles, increased the minimum wage for all taxi and Uber and Lyft drivers, and created a $2.75 surcharge on all Uber or Lyft rides south of 96th street. If these rides are believed to be so convenient, what prompted these actions?

One reason for the New York City Council’s decision to vote in favor of halting new issuances of for-hire vehicles is one near and dear to the hearts of many impatient New Yorkers: traffic congestion. In 2017, the average speed of a vehicle during Manhattan’s business hours dropped to about six miles an hour–a rate that is only double the average human being’s walking speed. While over one-third of all for-hire vehicles in New York City are empty at any given time, New Yorkers are also reluctant to use the city’s crumbling MTA public transportation services. Although the reliability of Uber and Lyft appeals to city-goers afraid of horrid delays and mechanical failures on the subway, more ride-hailers will only lead to more traffic.

The rise of Uber and Lyft has threatened the existence of a popular New York City icon– the yellow cab. The total number of Uber and Lyft vehicles in New York City more than quadruples the number of taxicabs, and many taxi-drivers have found themselves increasingly losing potential rides to newer ride-hailing services. Economic despair in the industry has led eight professional drivers in New York City to suicide, with many of them expressing concern over the difficulty of creating a living through driving taxis, especially in the face of ride-sharing giants. Also, a new $2.50 surcharge has recently been tacked on to all taxi rides in Manhattan to decrease congestion and raise funds for the MTA, while the surcharge is $2.75 for Uber and Lyft rides. The surcharge creates fear among taxi drivers, who are worried their services will become less attractive due to rising prices.

In attempts to push back against new pricing rules, Uber and Lyft have both stated that the new legislation will unnecessarily increase ride fares for customers as well as limit business competition. Uber also believes the higher minimum wages, aimed at bettering professional drivers’ lives, will counteract attempts to reduce traffic congestion in Manhattan. Lyft expressed concerns that drivers will now be disincentivized to give rides outside of Manhattan, as surcharges only apply south of 96th street. Additionally, other companies can pay their drivers less, thereby undermining competition.

Will these new rules cause New Yorkers to turn towards underground transportation, bikes, and walking in the future? Or is $2.75 and an extra wait time a small price to pay to avoid subway delays and chilly weather? While the future implications of such legislation are still unclear, New York City has played an important role in the evolution of ride-hailing services by being the first city to take the wheel and protect its drivers.