Uber close to partnership deal with San Francisco Taxi Outfit

SAN FRANCISCO — Uber’s plan to attract more taxis to its platform over the next few years may soon reach another milestone.

The company is set to strike a deal with San Francisco partner Flywheel Technologies to allow Uber riders in the city to hail a cab through the Uber app, according to four people familiar with the matter and a video presentation by the city transit agency. which was seen by the New York Times.

The next step is for the San Francisco Municipal Transportation Agency Board of Directors to approve changes to a pilot program at its April 5 meeting. The city’s transportation director would then have to authorize it, paving the way for Uber and Flywheel, which operate an app used by hundreds of taxi drivers in San Francisco at multiple taxi companies to accept rides.

The deal, following last week’s announcement of a similar partnership between Uber and taxi companies in New York, would mark a sharp break from years of fierce fighting between the two groups. If approved by regulators, the partnership in San Francisco could begin as early as May.

Uber has called the taxi industry corrupt and greedy, and a San Francisco taxi company has already sued Uber in federal court, accusing it of predatory pricing practices. Some taxi drivers are pushing back against the idea of ​​a partnership, fearing it will lead to lower revenue and make it harder for long-time taxi customers to get affordable rides.

The deal is particularly surprising because San Francisco, Uber’s hometown, is among a group of cities that have at times aggressively resisted Uber’s activities. Uber, along with other companies that use yard workers, like Lyft and DoorDash, backed California’s Proposition 22, a measure that gave yard workers limited benefits but barred them from being considered employees. fully fledged. Although the measure passed statewide in 2020, before a judge threw it out last year, San Francisco was one of the few counties where a majority of voters opposed it.

In recent years, Uber has partnered with taxi companies, mostly outside the United States. The company said in February that it added 122,000 taxis to its platform last year.

The taxi industry had been losing customers to ride-sharing services like Uber and Lyft even before the pandemic dramatically reduced travel demand. The number of taxis in service fell to 400 during the pandemic – from 1,300 – before rising to 600, the Municipal Transport Agency said. Partnering with Uber could give taxi drivers access to a much larger pool of passengers, while Uber would source in the form of hundreds of taxi drivers.

Last year, San Francisco approved a test program that would allow passengers who ordered a taxi using an app to receive a guaranteed upfront cost, similar to how Uber and Lyft operate. The aim was to help taxi drivers make more money, in part by countering a phenomenon called meter anxiety – the idea that the discomfort of seeing the cost of a trip increase in real time over a taxi meter prompts riders to cancel a trip or avoid calling a taxi in the first place. The initial cost had to be the same as the cost of the trip if it was calculated using a meter.

Now Uber wants to join in on this experiment, with a twist: if San Francisco approves so-called “third-party dispatch services” like Uber to participate, the upfront cost Uber charges customers to get a taxi through its app won’t will not be required to be the same as a metered taxi ride. This means they could charge the same price as a typical UberX car ride, which is often cheaper than a taxi ride.

Some San Francisco taxi drivers fear being offered cheap rides that only earn them a few dollars. Others worry that rising prices — when Uber raises fares in times of high demand — will allow current low-income taxi customers to get around.

“It’s just not fair,” said Evelyn Engel, board member of the San Francisco Taxi Workers Alliance, which supports taxi drivers. She said she and other taxi drivers heard about Uber’s involvement in the pilot program from the city’s transit agency.

“Uber is going to have hundreds of full-time drivers on its platform,” Ms. Engel said, but taxi drivers “won’t even be paid a per-ride rate that allows them to live in dignity.”

Muwaffaq Mustafa, 53, who has been a taxi driver for decades and now also runs the operations of Flywheel Taxi – the company that once sued Uber – said he believes the partnership with Uber will make taxi drivers richer and could help save a struggling industry. The slightly cheaper journeys, he said, would be offset by increased demand.

“I am optimistic if this agreement is reached, we will make up for all these past years,” Mustafa said. “More calls, more value, and that’s more money.”

George Lama, 60, a taxi driver in San Francisco for 20 years, said the partnership was necessary because passengers were now completely unaware of taxis. He waits outside hotels in a line of taxi drivers to pick people up, he said, but they order Ubers instead.

“Nobody is watching us because they are conditioned on Uber being faster, bigger fleet, cheaper,” Mr Lama said.

In December, Hansu Kim, president and co-owner of the Flywheel Taxi-Hailing app, told a panel at a conference of transportation regulators that the taxi industry’s approach to technology resembled “dinosaurs that are still in the tar pits”. and that he was speaking with Uber to help taxi drivers gain access to ride-sharing customers.

“If we don’t co-opt this technology as the norm, we’re going to continue to be marginalized,” Kim said in a video of the meeting, which was seen by The Times.

Uber could benefit from this partnership by potentially gaining access to hundreds of additional drivers; although he said he saw the number of drivers rebound in recent months after many left during the height of the pandemic, many drivers still complain of low incomes and some said they had left the platform or started driving less as gas prices rose.

The Municipal Transport Agency says taxi drivers will also benefit. “The taxi industry is taking advantage of Uber’s large constituency population and pushing it towards the taxi industry,” Forest Barnes, a transportation planner for the agency, told taxi drivers during a recent Zoom meeting seen by the Times.

If taxi drivers see more money from the partnership, it could encourage some taxi drivers to consider operating taxis instead. But some taxi drivers are reluctant to merge.

Marcelo Fonseca, 62, said he’d rather “drive empty” than ride passengers for Uber or Lyft. “My morals, my ethics and my principles would never allow me to be part of it,” he said.

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