Uber Is Serving New York’s Outer Boroughs More Than Taxis Are

http://fivethirtyeight.com/features/uber-is-serving-new-yorks-outer-boroughs-more-than-taxis-are/

by svtrent • 11 years ago

162 110 11 years ago

fivethirtyeight.com

GeorgeOrr• 11 years ago

For a long time Taxi's have had a monopoly on their market. Like any monopoly they under-serve.

Nice that Uber is shaking that up.

radley• 11 years ago

Uber is serving Oakland CA waaaaaaay more than taxis ever would.

ghshephard3• 11 years ago

And South Peninsula - Getting a Cab in Redwood City, or Cupertino used to be a minimum 30 minute way (Which I never understood - how can it always be 30 minutes, why would there never be a cab 10 minutes away) - and, late at night, Cabs would sometimes just not show up at all.

Uber is typically a 5-10 minute call away during the daytime in Redwood City/Cupertino, and later at night, around 9:00 PM, you can get an Uber in < 20 minutes, which is awesome compared to the way it used to be.

SilasX2• 11 years ago

By coincidence, I just did a hackathon in Redwood City this weekend, and on Friday ~11pm I was able to get one at an office park that arrived just after I made it outside from the 2nd floor.

Whatever forces stopped this kind of thing from working before were destroying a lot of value. I know there's always the talk of what cost Uber most be socializing with this service, but even at a 50% fare increase that would have been an extreme improvement over the previous options, so you can't really explain it away as pure cost hiding.

naturalethic• 11 years ago

HN plz stop making certain comments nearly impossible to fucking read on my phone. Thanks.

JohnyLy• 11 years ago

I am not surprised. Last time I was in New York, I wasn't in downtown and it was so hard for me to get a taxi. There are so many taxis in NYC but most of them stay in the same area. As soon as you are not in a populated area, it's close to impossible to grab a taxi. I am pleased that Uber is making things move.

smackfu2• 11 years ago

Isn't Uber really replacing calling a car service or taxi then?

jmspring• 11 years ago

Seems like the best use for uber. Honestly, in European capitals I've been in, uber was better in the outskirts than hailing something in the interior. Seems like a logical extension.

In some cities, like Tel Aviv, Get Taxi and Uber use a similar model (all licensed cabs) but coverage and penetration matters.

jsilence• 11 years ago

Here in Germany you call a cab with your phone when you are away from the city center. Usually the taxi arrives within ten minutes.

cmsmith• 11 years ago

You can do that in the USA too. Generally, the cab will arrive - but in many cases it is not profitable for the driver to come out of their way to pick you up so sometimes they will not. The problem being that cab drivers are mostly independent contractors, and the cab dispatcher and government regulators don't have much ability to force them to do things that will lose money.

hackuser3• 11 years ago

but in many cases it is not profitable for the driver to come out of their way to pick you up so sometimes they will not

How is the same thing profitable for Uber drivers?

pbreit3• 11 years ago

Requesting on your phone and seeing exactly where the car is is much better.

brandonmenc2• 11 years ago

I was in NYC a couple weeks ago. Uber driver told me his brother drives a cab.

I asked if the cabbies were mad at Uber. He said Uber is good for them because it reduced competition among cabbies for cabs. Apparently, before, you'd go pick up your cab for the day and they'd tell you there were none left. And if you did get a cab, the dispatchers would demand money in exchange for sending you good fares.

Seems like Uber is good for cabbies, but not necessarily the medallion holders.

The TV was also full of anti De Blasio ads from Uber.

gojomo• 11 years ago

A couple of Las Vegas cabbies have indicated to me that they were hoping Uber would arrive in full force, because the deal they get from the incumbent operators is so bad.

omegaworks• 11 years ago

Boston Globe had particularly good coverage of the cabbies' plight.

https://www.bostonglobe.com/metro/2013/04/01/spotlight/IkU7k...

JshWright• 11 years ago

Planet Money did a piece on one of the larger medallion holders, that had the same conclusions.

http://www.npr.org/sections/money/2015/07/31/428157211/episo...

knd775• 11 years ago

I live in Virginia and have been getting those anti De Blasio ads... I'm not sure why.

brandonmenc2• 11 years ago

I'd guess because there's a lot of commuting between NYC and the DC area.

hackuser3• 11 years ago

But not Upper Manhatten. The way the questions are constructed and the way the author headlines where Uber is superior, rather than inferior (or better yet, rather than both), feels like yet more Ubermania, not balanced analysis. It's getting old.

I'm not even quite sure I know mine or the public's interest? Why do I care?

Hmmm ... At least, drivers and passengers should be protected, and I think services should be available to as broad a segment of the community as possible. And decisions for the community should be made democratically, not by whoever spends the most.

13thLetter• 11 years ago

And decisions for the community should be made democratically, not by whoever spends the most.

Is "What cab service should I, a random private citizen, use?" a decision for the community to be made democratically?

hackuser3• 11 years ago

An excellent indicator of Ubermania is that the parent comment was voted down to -4. (I don't care about the points.)

minimaxir2• 11 years ago

I took a look at the monthly revenues of Yellow Taxis and the # of total fares with the NYC TLC data set that was released last week.

   SELECT LEFT(DATE(pickup_datetime),7) as month,
   SUM(fare_amount) as total_revenue,
   COUNT(*) as num_fares
   FROM [nyc-tlc:yellow.trips_2014], [nyc-tlc:yellow.trips_2015]
   GROUP BY month ORDER BY month

Here's the quick-and-dirty output: https://docs.google.com/spreadsheets/d/1NVcScdHtcWvF9oSZGE3_...

If Uber is eating the TLC's lunch, why isn't there a dramatic shift in revenue loss? (trendline has only a slight decline) However, it does appear the # fares are on a downward trend.

Axsuul2• 11 years ago

It's important to note that Uber also created a brand new market. Many of my friends, and myself included, would've never considered using taxis "back in the day" when doing errands or day-to-day activities. Alternatives would've been to just drive ourselves or take public transportation. Uber and Lyft have made it frictionless and convenient enough for everyday use.

What I'm trying to say is that Uber isn't only cannabilizing the market share of taxis. Yes, they are definitely taking some of that, but more importantly they are differentiating themselves enough to cater to a whole new crowd that wouldn't have ever used taxis in the first place.

icelancer• 11 years ago

Many of my friends, and myself included, would've never considered using taxis "back in the day" when doing errands or day-to-day activities

Absolutely. I would NEVER use a cab to get to/from the airport. But I will use Uber. Doesn't even have anything to do with pricing - far more to do with service.

rconti• 11 years ago

... which is interesting, because while it demonstrates that cabs are perhaps not as damaged by Uber's business model as they claim they are, it plays into DeBlasio's arguments that Uber increases congestion.

Intuitively, I'd say Ubers spend less time driving around looking for a fare, and a more intelligent dispatching/routing model would decrease fareless miles driven. That said, if it causes a shift from subways, it would increase congestion.

I don't think this is a reason for the government to attack Uber. If traffic is a problem congestion charge type systems would be more effective, as it would 'penalize' all players equally; Uber, Taxis, and private vehicles.

Of course, there are plenty of reasons for them to attack Uber already; the contractor model, the beg-for-forgiveness model, etc.

patio11• 11 years ago

The existence of Uber literally changes my business travel planning. Previously I'd always pick a hotel within walking distance of the primary purpose of the trip (company office/conference/etc). Since Uber exists, I get to pick any hotel in the city. I literally ran up more in Uber bills in 2 weeks than I've spent on American cabs in 33 years and couldn't be happier with it.

(Anecdata: I actively avoid American cabs because I seem to have a sign printed on my forehead "Please try scamming this kid. He will not escalate and call the cops." Including, relevantly to this article, twice getting into a cab in Manhattan and told that the cab did not service Brooklyn.)

virusduck• 11 years ago

I think this is the biggest point taxi companies fail to grasp. I NEVER consider taxis. I would sooner walk than take a taxi. Uber doesn't have the same grody, sketchy perception that taxis do. I have never had to call Uber on an Uber driver, while it seems like I nearly ALWAYS had to threaten to call the cab company on the cabbie ("Cash only", taking some idiotic route, etc). It is WAY too much work to get a ride home from a taxi.

pdq• 11 years ago

I ran a quick year-over-year comparison on your data, for Jan 2015 -- June 2015 (compared to Jan 2014 -- June 2014), and the average reduction is -7.8% of revenue and -9.7% of trips.

IMO, that's quite significant for a 1 year drop.

minimaxir2• 11 years ago

Ah, that's probably a better way to look at it than from the straight linear trend.

Axsuul2• 11 years ago

Another observation is that taxis will also have their own place too. Taxis have the benefit of being in the right place at the right time. They're distinctly marked and you don't even need an app to use one. Just raise your hand and you're good to go. There will always be impulse purchases when it comes to needing to get a ride. Perhaps it's raining, you have no shelter, you need to get into something, anything. Or you've just arrived at an airport, full of luggage, after a long flight, you just don't want to deal with calling an Uber.. oh look, a line of taxis ready and waiting. Ride share services and taxis both won't go away because they each have their own distinct advantages and use cases. And as the population grows, there will still be a large enough market for both to exist and profit.

Rezo• 11 years ago

I'm not so sure... even at the airport, with a traditional taxi I have to worry about whether they will take my credit card (or take it but complain about it), if the taxi is clean, if the driver is some weirdo, will I get attitude about my destination, figuring out the tip etc.

I recently used Uber at the San Jose airport and it was a glorious experience. The app switches to a different UI specially for the airport, I select the exit number I'm standing next to and the ride shows up in about 2 minutes, the driver already has my destination on his GPS before I get in (no more sightseeing tours), no fussing with payment at the end and I get a nice receipt emailed to me with the drivers details and the route taken. Taxis are going to have a hard time competing once more airports allow Uber properly. And they've got no one to blame but themselves.

concerned_user• 11 years ago

I live in Europe and for the last 15 years taxis prefer to be hailed via phone/sms rather than hailed on the street. If you hail a cab on the street you will get a higher rate plus a hailing fee. Cabs near airport/railway station that are parked there are a tourist trap since they charge almost triple price plus drive you a longer route. Basically a taxi company strikes a deal with city council so only their cabs are allowed to park there and then make their "hail from the street" rate as high as local laws will allow.

isubkhankulov2• 11 years ago

an old business professor of mine from college, who took a company public at one point, taught us that "if you're not growing, you're dying". the same mantra is now repeated here in silicon valley in the form of "move fast and break things" and "grow as fast as possible",etc.

regarding your spreadsheet, it doesn't take into account seasonality. factors such as weather and tourist activity certainly affect revenue.

if you take the total revenue in months Jan-June 2015 and compare them to the same time period in 2014, the delta is -8%. if you look at the last datapoint and compare to the first, you get a drop of 1%.

untog6• 11 years ago

They're not eating the yellow/green cabs lunch, but they are taking jobs from livery cars. Unfortunately we don't have data on their earnings.

CPLX2• 11 years ago

They are livery cars.

smpetrey• 11 years ago

Probably because of the TLC stronghold in Lower Manhattan. I think it goes without saying that most of the hottest, quickest fares can be made on the island. If Uber can penetrate those fares, the slope would be more dramatic.

Time will tell is my guess.

seizethecheese• 11 years ago

Earnings for Uber Driver = (timeDriving - timeLookingForFares) * payRate

Earnings for Cab Driver = (timeDriving - timeLookingForFares) * payRate

As a taxi driver, timeLookingForFares is heavily dependent on the amount of people hailing cabs per block driven. As an Uber driver, since you are routed to fares automatically the timeLookingForFares variable is dependent on both how far away other cabs are and the density of riders.

Clearly cabs should clump in higher density areas.

cmarschner• 11 years ago

Serious question: are there no taxi apps in the US? You would think cabs would also be routed to the next customer automatically?

dylanjermiah2• 11 years ago

There are. But, they are inherently limited. Via fixed supply and fixed pricing.

marquis• 11 years ago

I'm not sure what stops EasyTaxi from working in the U.S. I use it in South/Central America and it routes regular taxis, you pay in cash like usual but get the convenience of the Uber experience of knowing a cab is on the way, and who the driver is.

http://www.easytaxi.com/cities/

untog6• 11 years ago

NYC is a special case - yellow cabs are not allowed to be prebooked in any way, shape or form. Street hails only.

(they're piloting an e-hail scheme, but it's far from done)

ploxiln• 11 years ago

I talked to an Uber driver who said he previously drove a cab for 15 years (in NYC). His biggest complaint was the medallion rental fee, it comes out to over $100 per day (around $150 at peak I think?), even when you're sick or you want to take a vacation. You just can't, you can't afford it.

He shared a cab with a rented medallion with a friend, they would each do a shift each day. One week there was some serious engine trouble, and the cab was in the shop for a week, neither of them could drive it. He called the medallion owner to ask for leniency, and was told that if he wanted, the medallion would be removed and he would be out of a job. Otherwise he can continue paying over $100 per day.

Apparently the accounting with uber doesn't penalize you to the same degree when you need to take a day off, even with car payments and such for maintaining a nicer car.

jsjohnst2• 11 years ago

This isn't true in the usual case, they don't usually pay unless they drive except in the weekly case (and are paying lower per day cost). Most companies charge about $125/day or $500ish/week. If they do the day rate, they get paid the same day for CC transactions (unlike cities like SF which take comparatively forever). Yes, this is still seemingly high cost, but when you consider the medallions cost $600k (which is down from the million plus pre Uber) and the fact that drivers don't own the car and also don't pay wear and tear on it, it's not so crazy.

I take Ubers and cabs every day and usually talk to the drivers about their experience if they are friendly. Both systems have their ups and downs and I can assure you neither has the interests of the driver in mind. It's simply up to the driver to decide which of the two evils hurts them less.

1971genocide• 11 years ago

I listen to NPR and it seems there is a lot of anxiety among people about technology and automation and it seems all doom and gloom, it almost makes me feel guilty.

But after I though about for a while I realized its all rubbish and technology is being used as a scapegoat.

Technology has allowed constant deflation in the past 40 years for everything from food to transportation due to enormous efficiency gains.

If it WAS NOT for technological innovation there would have been a revolution by now, since cost of housing, education and healthcare has shot up ( as well explained by Elizabeth warren's research ).

While wages have been dropping in real terms. Essentially technology has allowed people to afford clothes, etc. Without it the average person wouldn't be able to afford anything.

So the reality is things like the Uber revolution is not happening fast enough ! The average cost of taxi rides is ridiculous compared to what it was in the past.

The real controversy is not Uber causing joblessness. If we want to innovate a lot - there is always going to be constant destruction of old methods. Uber will be replaced with driverless cars, who will be replaced by personalized solar driverless cars, etc.

Those jobless people should became part of the supply to bring those changes.

----------------------------------------------------------

Dr. Raghuram Rajan [1] essentially helped me see capitalism and the free market in this new more enlightened light.

Capitalism seems to be getting a lot of bad rep since 2008 - but its not the fault of the free market. This medallion bullshit is what is holding the free market behind and creating a welfare system for taxi drivers and billionaires.

In a real free market billionaires would quickly lose their wealth as new competition would destroy their wealth.

Rather than protect workers - we should try to retrain them for the coming knowledge economy.

[1] Dr. Raghuram Rajan predicted the financial crisis in 2005 while working for the IMF. He has a great book called "Saving Capitalism from the Capitalist".

His argument for reform is really controversial - essentially he states the US economy is overinflated, the military industrial complex, housing, financial services. While the real economy hasn't been able to grow, compared to germany, etc.

He doesn't believe the Keynesian argument about a loss of aggregate demand - there is always demand for things - housing, better healthcare. Its just that the supply side is completely distorted - and this taxi cartel is one example.

The US spent trillions on QE to prop up the housing bubble even more - while it could have used that money to retrain the workforce to do more productive things - more doctors, more engineers to create robots.

Even though there is no demand for houses at the price that people want to sell. Sure a lot of baby boomers will end up with negative equity but that is capitalism and Free market ! Its your decision to tie up all your wealth on your house rather than invest in your kid's education or pay higher taxes so government could pay if for you and create better healthcare.

The government is the biggest culprit, they tried distorting the market by allowing the buyers to have more credit than they could afford.

Sorry about being so ranty. But I do not want my industry to be scapegoated.

crdoconnor• 11 years ago

This medallion bullshit is what is holding the free market behind and creating a welfare system for taxi drivers

How exactly is being forced to pay to do your job a "welfare system"?

pjc502• 11 years ago

Yeah, it's very definitely a form of rentier capitalism: the creation of an artificially scarce resource on which monopoly rents can be charged.

kin• 11 years ago

I was in NYC a few weeks ago and Lyft Line was $5 flat rate anywhere in Manhattan! Beats taking the subway if you ask me.

On a more related note when I was in Bushwick in Brooklyn it was pretty much impossible to even see a cab let alone hail one. I didn't even think twice about calling an Uber to take me back to the city.

untog6• 11 years ago

I was in NYC a few weeks ago and Lyft Line was $5 flat rate anywhere in Manhattan!

Here's the problem with that - it's a heavily subsidised, promo rate. None of us should get used to it, because once Uber/Lyft destroys the other they'll stop doing it.

jdminhbg2• 11 years ago

That's definitely a limited-time-only offer, but how are Uber or Lyft going to destroy each other? Maybe by erecting some kind of regulatory wall, but otherwise, the barrier to entry seems so low it's hard to imagine one of them winning a monopoly.

somberi• 11 years ago

This is good to know, but not very surprising. NY Taxis are known to refuse rides to outer boroughs. A decade ago, one had to jump into the cab, tell him that the destination is some fancy neighborhood, and then once he flags the meter you tell him the real destination (Queens - gasp; Bronx - sheer cursing). And often when the driver threatens to drop you off midway, you call the authorities while in the cab.

For readers who think this is traumatic, it was, especially in winter nights and your destination is not served by Subway.

In fact, some friends of mine that are Black had to dress extra nicely for an otherwise casual dinner on Friday nights, just so that the cabbies would think (wrongly) that the fare would be for some nice neighborhood. And one had to make sure, he stands on avenues that are not pointing towards Harlem. It was a done thing for a white buddy to hail the cab, and the black friend gets in (There is a certain choreography that goes into this - the black person had to stand close but not-too-close and in a location where he can apparate after the cab has come to a halt but not in a way that gives him a chance to rev up and scoot).

Here is a recent article from Huffpo and Washpo that talks about this in detail:

https://www.washingtonpost.com/posteverything/wp/2015/07/23/...

http://www.huffingtonpost.com/paul-larosa/nyc-cab-drivers-bl...

pbreit3• 11 years ago

I don't think that's the problem so much as simply that Uber's model is more effective at serving the outer regions.

jahnu• 11 years ago

Out of curiosity can one not order a regular cab by phone to come and pick you up at a destination and the dispatcher already knows the destination?

Where I live that's pretty normal and only costs a tiny bit more.

juliangregorian• 11 years ago

In many neighborhoods you can get a car service to do so yes. It's not feasible in all situations however.

Spooky23• 11 years ago

Cabs are hail only. Car services in NYC are either pretty shady or expensive.

The cheap reliable ones used to be focused on specific ethnic groups. Now they have green cabs that work the boroughs and take calls as well.

djhworld2• 11 years ago

Is it illegal for a cab to refuse a fare in NYC?

hooo• 11 years ago

Yes

weeksie• 11 years ago

A decade ago? Hell, that still happens with frequency. I don't know how many times since I moved out to Brooklyn that I've pulled the "hop in back and misdirect" strategy. I'll sit in a cab and call 311 and put the phone on speaker, that usually gets them moving.

And the black person thing? I've _definitely_ flagged down cabs and then stepped back so that a black guy who was getting ignored could get a ride. It's infuriating.

jedrek• 11 years ago

I think you've really hit on one of the reasons that cab driver protests fall on deaf ears: nobody likes cabbies.

In my experience, Uber's cars are cleaner, I have a lot less trouble paying (had a card declined once, but I was informed after my ride - no awkward interaction with the driver) and - let's be real - most modern cab drivers use the same GPS the Uber guys do.

On the other hand, anybody I know who's taken cabs regularly has had issues with them. I've had drivers try to rip me off in Greece, America, Poland and Austria. Not turn on meters, switch meters to a higher rate, cranked up meters. I've had cabs that stank so bad we had to drive with the windows open in the winter. Cabs that put out black smoke behind me. Cabs that canceled 2 minutes before they were supposed to show, leaving me in a panic. A few years ago here in Poland, if a driver made up to some amount, he had a simplified (easier to cheat) tax code. So lots of drivers stopped driving in late November... which meant getting a cab around Christmas was almost impossible. Who the hell would want to catch a cab around Christmas/NYE anyway, right? /s

With Uber I take my ride, get out, get an email with the route and price I paid. I can dispute the route (never had to), I have some sort of evidence, even if me and the driver get in an argument. Thing is, I've never had that issue with them. Ever.

Yhippa• 11 years ago

This is such a good point. Uber has normalized the taxi experience. Hailing cabs in different cities across the world can be stressful. I remember the streets in Abu Dhabi being huge and getting a taxi was pretty competitive at certain times of the day and hoping that one would even come by. I love that I don't have to deal with dispatchers and how wildly inaccurate they were (almost always on the late side).

In fact if a city had Uber service I would be potentially more likely to visit knowing that getting around would be that easy and not creepy like you mentioned.

pbreit3• 11 years ago

I think it's fairly obvious that the Uber/Lyft model is inherently more effective at serving the outer regions.

I'd be more interested to understand if Manhattan congestion is a legitimate concern.

ehmuidifici• 11 years ago

Meanwhile, in Brazil, Uber Drivers are being kidnapped by taxi drivers and get their cars smashed...

GFischer• 11 years ago

Same here in Uruguay for EasyTaxi drivers (an Uber clone).

I was encouraged to apply for at position for Uber in Uruguay, but I'm really not cut out for the work (it involves fighting the extremely strong cab driver's union here, which isn't above kneecapping).

smackfu2• 11 years ago

Doesn't it make sense that street hails would be lower in areas with a lower rider density?

eyeinthepyramid• 11 years ago

The title of this article is a little misleading. In absolute terms, medallion cabs are still about 10x more active in outer boroughs than Uber. (~1M rides for Uber vs ~12M rides for green/yellow cabs).

It seems like it would be more appropriate to compare these figures to other livery cab companies since that is essentially what Uber is. I don't think it's very surprising that Manhattan has a higher percentage of street hails than the outer boroughs.

misiti3780• 11 years ago

did they release this uber data to the public: i dont see it in these tables:

https://bigquery.cloud.google.com/results/emerald-diagram-43...

Uber Is Serving New York’s Outer Boroughs More Than Taxis Are

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