If you’re a New Yorker, I don’t have to explain how your lifestyle likely relies on getting around the city safely, comfortably and with as little hassle as possible.

Hopefully, it’s at a reasonable price as well.

One option is navigating the streets in your own vehicle — not quite as stressful as a divorce but still among the first ten items on the “let’s-try-to-avoid-it-at-all-costs” list. Locating a parking space in NYC is like finding Waldo. Maneuvering into one? Well, that’s another story.

If you’re fortunate enough to have a garage in your building, those monthly fees add up, too. Therefore, you should have the highest respect for those professional drivers that shuttle you to and from work, airports, restaurants, events, and other destinations.

Getting Around NYC

In 2013, a yellow cab medallion was selling for close to a million dollars, representing the dominant player’s valuation for getting New Yorkers to wherever they wanted. Today, you can buy one for less than $100,000 — a mind-boggling ninety percent depreciation. So, what happened here? Uber, followed closely by Lyft, is what happened. They turned the yellow cab institution — a New York mainstay for one-hundred-and-nine years — upside down and inside out in less than five. 

Let’s not kid ourselves; Uber was a juggernaut industry disruptor that hit the New York streets in 2014, taking full advantage of the digital era. It blew past the yellow cab numbers in 2017 and transported people at double the latter’s rate by 2019. Throw Lyft into the mix with approximately two-thirds of the dropping yellow cab volume. It’s safe to say traditional taxiing faced a survival crisis it never banked on. The latter’s steadfast and loyal client base abandoned the ship in droves (commonly known as customer churn) in favor of the new sheriffs in town. So what was the unique package everyone bought into?

  1. Convenience with a capital C

  • Every New Yorker has a mobile phone. Instantaneously hailing a ride through an organized app beats standing in inclement weather trying to grab a cabbie’s attention.
  • With GPS tracking, connecting to the Uber driver was easy and time-wise amazingly accurate. With so many drivers out and about, there was never a long wait.
  1. Sophisticated pricing structures
  • In peak periods, “surge pricing” took the fares up, and vice versa, but bottom line, pricing generally undercut yellow cabs’ meter rates. Riders accepted the logic and fitted into the flexibility like a hand-in-a-glove.
  • Carpooling services provided those looking for substantial fare discounts with a fantastic option. Sharing your ride with others going more or less in the same direction hammered another nail into the yellow cab driver’s coffin.
  1. A digital rating system

    This worked nicely to promote friendly driver/passenger connection — a big plus versus taxis where customers encounter rude or brusque driver behavior from time to time.

What’s Changed?

On June 29, 2021, I tried to use Uber to e-hail a ride to John F. Kennedy International Airport. It was midday, and the quote was $140 (more than double as I remembered it).

A popular black limousine company was slightly cheaper, but significantly short on drivers when I called at the last moment. So, even at the price, it wasn’t a viable option.  

My being saddled with a triple-digit price tag pales in comparison to Sunny Madra’s recent experience. Madra, the VP of Ford’s accelerator program, posted screenshots of the same ride (more or less) for $248.90.

He tried to hail a cab for twenty minutes with no success before resorting to the exorbitant Uber fee. As it turned out, the airport commute was approximately the same as Sunny’s one-way air trip to San Francisco. 

As for me, I opted to stand on the curb and hail the traditional way, which took less than a minute. The out-of-pocket cost (including tolls and fifteen percent tip) topped out at $66 — a significant difference that makes a difference in anyone’s book.

The ride itself was pleasant and comfortable. 

So, was my flip to a conventional taxi an exception? Or is Sunny’s debacle the rule of the day? I’ve asked friends and family for their experiences:

  • It seems that I was fortunate to hail a yellow cab so easily. Thousands of them lie idle (even with virus fears fading). There used to be around 10,000 traversing the New York streets at any time. Reliable estimates put the number at 3,500 (i.e., a third). Logically it should take a hailer three times longer to find a cab these days.
  • A compelling force behind the supply issue that resonated with me was the value collapse of city-issued medallions (see above). Cabbies are, on average, in debt to the tune of $450,000. When you’re driving all day to cover monthly installments and still can’t do that, things look bleak.  
  • On the other side of the coin, Uber and Lyft deal with considerable demand and a severe driver shortage. Many of the latter gave up during the shutdown and aren’t rushing back. Also, the unemployment benefit effect isn’t over. Uber drivers before Covid may be relying on these checks until they stop sometime in the next two months.
  • Surge pricing, the safety valve pre-Covid for the ride-rush moments, now seems to be the norm. Everything is in surge mode. 
  • The economy option of ride-pooling left the stage during the pandemic, and its memory is fast fading. Somehow, it makes a mockery of the Uber and Lyft sophisticated pricing structures and their sustainability. The idea was to create time-related and demographic verticals within the overall ridesharing space. Now, everyone’s thrown into one pot – and “expensive” is its name. 
  • Even if you’re prepared to go with the premium fares, waiting times are longer. The days of plugging into the app, then stepping into your Uber in the next ten minutes (at most) are gone.
  • Some of my friends have concluded that short trips by Uber are out of the question. “Pricing” and “waiting” as a tandem duo is a massive turnoff. Many of them wouldn’t dare opt for the subway eighteen months ago, but have since then purchased season metro tickets. 
  • One family comment underlines the shift in getting around Manhattan: “For me, the day Uber quoted me $60 to cover the three miles from my office in the Sugar Hill section of Manhattan home was the day the music died.” 
  • The one big thing yellow cabs have in their favor in this new reality — for now — is non-spiking metered fares. If you are lucky enough to catch one, it’s not going to be a rip-off. 

Where are things going? 

Lyft and Uber are resorting to “out-of-the-box thinking” to get drivers back into their system. Incentive programs, better working conditions, and digital innovations are in the cards. It’s vital to retrieving the benefits that created the advantage in the first place — price and convenience. 

Meanwhile, yellow cab drivers desperately need a rebranding to incentivize the 6,500 or so idle taxis somehow back onto the NYC streets. So who’s winning the war? Truthfully, it doesn’t seem to be all that relevant when the arena itself is in disarray. Customers are hurting, and both sides shouldn’t take that lightly.

GP
Gordon Polovin
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