Uber’s prices in New York — its largest market in the U.S. — are going to be higher in 2019. So are Lyft’s. Any ride-hailing vehicles carrying passengers in the busiest areas of Manhattan have to collect a $2.75 fee starting Jan. 1, a plan intended to reduce traffic and raise money for the city’s Metropolitan Transportation Authority. Uber says a freeze on new licenses has already been putting upward pressure on prices, as will a minimum wage rule
for ride-hailing drivers slated to take effect later in the month. Like any self-respecting tech company whose core product is a mysterious algorithm, Uber says it’s not sure exactly what prices will look like next year, saying only that they’ll be higher.
Uber usually opposes anything that makes its service more expensive. It has been relentless in its pursuit of cheaper prices as it has evolved from a luxury black car service to a company seeking to lure bus riders into carpooled commutes. But while the company has fought against both the new wage rules and the freeze on new drivers, it has embraced the congestion fees. Both Uber and Lyft supported the $2.75 charge, and are actively lobbying in Albany, New York and elsewhere for more ambitious plans to charge all vehicles to enter highly-trafficked downtown areas.
So-called congestion pricing has long been popular among transportation policy experts, many of whom see it as a key component to solving the problems of urban transportation. Uber and Lyft — widely blamed as a key source of gridlock — have gotten behind it largely because they’d like their drivers to be able to move crosstown in less time than it takes to walk. The more expensive it is to drive oneself into town, the more attractive ride-hailing appears. Uber also says that it has a stake in propping up New York’s transit system, because the subways allow for low rates of car ownership in the city, creating a large population of potential riders. If the initial round of fees leads to fewer rides in parts of Manhattan, that’s kind of the point, said Josh Gold, a spokesman for Uber.
The congestion fee for taxis is slightly lower, at $2.50 per ride, but drivers fear that any reduction in business will prove calamitous. “The yellow cab industry is in such a dire crisis that I think that this moment in time any kind of surcharge would have a devastating impact,” said Bhairavi Desai, executive director of the New York Taxi Workers Alliance.
The city’s yellow cab industry has been collapsing ever since ride-hailing took off. The number of weekly Uber rides in New York surpassed the number of cab rides more than a year ago, and Uber and Lyft trips combined are now twice the volume of the yellow cab industry. Trips in taxis are down over 30 percent from their levels three years ago, according to the most recent data from the city’s Taxi and Limousine Commission. The value of taxi medallions have plummeted, leaving people who own them struggling to pay mortgages on assets with shrinking earning potential.
Adding to the taxi industry’s sense of grievance is the anticipation that the fees set to take effect in January will do little to loosen Manhattan’s gridlock. Charles Komanoff, a policy analyst and environmental activist, forecasts just a 4 percent increase in average traffic speed. He said congestion pricing will only work if fees are levied on most private cars and trucks, but that implementing such a plan will be harder if the first round of fees don’t have an immediate impact. “There’s the unfairness of doing the for-hire vehicles before the private cars,” he said. “And at least as important is the missed opportunity of doing anything serious about traffic.”
Charging to drive in Manhattan could make other parts of the city more attractive for drivers, an opportunity ride-hailing drivers are better positioned to exploit. “We can avoid Manhattan and still make money,” said Saibou Sidibe, who was a cabbie for over a decade before switching to Uber several years ago. “For yellow taxi drivers, Manhattan is the only place.” Uber’s history of unsavory competitive tactics has also led to suspicion that it will tweak fares to hide the new fees in ways that taxis, whose fares are regulated, cannot. Uber says that it is required by law to pass the entire fee along to riders.
Taxi drivers also oppose the reduced fare for shared rides. Passengers requesting a pooled ride from companies like Uber, Lyft, or Via pay only 75 cents, even if they end up riding alone. Uber and Lyft have spent the last year trying to entice rides to take shared rides by making them cheaper, a task the new fees make easier. The incentive has a logical policy goal — more passengers in shared rides translates to less congestion — but pools are less common among taxis. There are apps cab drivers can use to get pooled rides, but taxis rely more heavily on street hails.
Taxi drivers are desperate for Albany to keep the new fees from going into place, or to gain some relief in a broader congestion pricing plan officials will begin debating in early 2019. Every day last week, a small group of taxi drivers stood in front of Governor Andrew Cuomo’s office in Manhattan, holding signs that said things like “Congestion Pricing = My Bankruptcy,” and urging passing drivers to attend a larger rally planned for Wednesday. Many cabbies laid on their horns, presumably in support, as they drove by.
Augustine Tang, a 34-year old driver wearing a flat-brimmed Phillies hat and shivering through his puffy coat, said he’d been duped by city officials. It’s a common lament among taxi drivers who bought taxi medallions, only to see their utility and value plummet as the market was flooded with Uber and Lyft drivers. Tang’s father left him his medallion when he died. “I inherited it — and also inherited the half a million dollar loan. I believed in the yellow taxi medallion, mainly because it was something he was so proud of owning. I just decided, you know what, I’ll take it over and try to make it work. That was three years ago,” said Tang, staring out into the traffic crawling up Third Avenue. “It’s been an uphill battle,” he said. “I should be working now, to be honest.”