Has Uber really disrupted the NYC taxi industry?

When you think about New York City, one of the images that comes to mind is surely the distinctive yellow taxi cabs, which are as iconic as the Statue of Liberty of the Empire State Building.

But the city’s taxis currently feel under threat by the ride-sharing startup, Uber. Early last week, a group of taxi drivers and companies filed a lawsuit against the city, claiming that the governmental Taxi and Limousine Commission is allowing Uber to operate illegally, giving them an unfair competitive advantage over traditional yellow cabs. Alistair Gardiner reports on the concerns of what was once one of the city’s most steadfast industries.

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If you head to East 28th Street at around 8:00pm, you’ll find yourself surrounded by rows of yellow taxi cabs, all with their lights off. It’s where cabbies from all over the city come for a good meal and conversation. Tonight everyone talking about Uber. Uber arrived in the city in 2011. And just 4 years later, there are more Uber drivers on New York City roads than yellow cabs. Masood Dirin has been driving a taxi for more than a decade. I asked him how Uber has affected his business in the past few years.

 

DIRIN: It affected it a lot. About forty percent of business has gone to Uber now.

 

And it’s not just the customers that the yellow taxi trade is losing. Many of the drivers are making the move to Uber too.

 

DIRIN: Most of them yeah, like you know… people get an opportunity, they are moving. Because there is less expense. If they buy cars, they have their own cars and flexible schedule.

 

It’s easy to see why a cabbie who is losing business would choose to start driving with Uber. You can be making just as much money, but you’re under a lot less regulation.

 

According to yellow cab advocates, that’s precisely the problem. Last week a group of taxi companies filed a lawsuit against the city. Similar lawsuits have been filed in Boston, Portland, and San Franscisco. Eric Hecker is the attorney representing the coalition of taxi drivers, medallion owners and leasing agents in the lawsuit. According to Hecker, the New York City taxi industry is a long-established system of laws and regulations…

 

HECKER: And Uber has upset that system, by enabling black cars who have not invested in medallions and are not licensed as Yellow Taxis to pick up hails.

 

But the lawsuit, Hecker explains, is primarily an issue of money.

 

HECKER: Well it’s economic disaster for yellow taxis. And it’s for a simple reason. It’s that Uber is competing unfairly.

 

How so? Well, Uber isn’t required to use a dispatcher, for example, while all other cab companies are. Uber drivers can use GPS technology to measure the distance of a ride to calculate a fare. Taxis cannot.

 

But Josh Mohrer, General Manager of Uber’s New York office, dismisses these claims of competitive advantage. Uber, he argues, is no different than a black car service, which can be requested by phone, but not hailed on the street.

 

MOHRER: So we said,  gonna operate in that part of the industry – using an app. And we met with the TLC and they explained that we would like you to own a base license, which we quickly did. And you know, we’ve been operating within the law of the TLC ever since.

 

And Mohrer notes of Uber drivers

 

MOHRER: So in New York City, every driver has a TLC license, they have a car is commercially insured just like taxis

 

Mohrer has his own take on the lawsuit.

 

MOHRER: So I think what you’re seeing there is, medallion owners frustrated that there’s a competitor in an industry that’s really had no competitors for decades.

 

We can expect a decision from the court by the summer. In the meantime, however, Uber will continue to attract customers and drivers alike. Back on 28th Street, Masood is thinking about his future. Will he drive for Uber? Well, he won’t rule it out.

 

DIRIN: I’m not sure, I dunno. (laughs) I’m not sure.

 

Alistair Gardiner, Columbia Radio News.

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