NYC's yellow cabs join carpooling trend
New York’s iconic yellow taxis are joining the carpooling phenomenon via two new smartphone apps. Arro controls the payment systems and video screens in about 8,000 yellow and green taxis while Bandwagon, a start-up, has been testing taxi-sharing technology at LaGuardia Airport since last year. The two apps are now pairing their technologies with a service set to launch by year end that enables customers to share trips at a cheaper fare in a yellow taxi. The new service is expected to make taxis more competitive against Uber and Lyft in an increasingly crowded market.

Carpooling fever is sweeping the nation — or at least the nation’s taxi services. Both Uber and Lyft are aggressively pushing carpooling on reluctant riders, who like the cheaper fares but are less bullish about sharing their trips with complete strangers. And now New York City’s iconic yellow taxis are jumping into the carpooling game, with the help from two app startups and one the country’s biggest taxi technology companies.

The taxi-sharing feature will be available on two smartphone apps: Arro, the taxi-hailing app created by Creative Mobile Technologies (CMT), which controls the payment systems and video screens in about 8,000 yellow and green taxis; and Bandwagon, a Brooklyn-based startup that has been piloting its taxi-sharing technology at LaGuardia Airport since last year.

CMT is partnering with Bandwagon to integrate the latter’s tech with Arro, the companies announced today. By the end of 2016, customers interested in trading up a solo trip for a cheaper fare can use either Arro or Bandwagon’s apps to book a shared ride in a yellow taxi.

The new feature will allow New York City’s yellow taxi drivers, who have long-complained about losing business to popular ride-hailing apps like Uber and Lyft, to be more competitive in the market, according to Bandwagon founder and CEO. David Mahfouda. “Drivers will be rewarded not only by higher fares from longer rides, but with an additional base fare of $2.50, for making two stops on the same ride,” he said.

“Drivers will be rewarded”

Ron Sherman, chairman, CEO, and founder of CMT (and with control of approximately 40 percent of the city’s taxi medallions, a member of the so-called “taxi cartel”), said the integration between Bandwagon and CMT “takes the iconic New York City taxi ride to another level by creating a more seamless experience for drivers and passengers alike.”

Arro was unveiled in August 2015 as the taxi industry’s last, best chance at competing with Uber and Lyft. The app allows customers to summon and pay for a yellow cab ride, which is appealing to those riders who are turned off by Silicon Valley’s attempts to disrupt the for-hire vehicle industry. A month later, Verifone, a public company based in San Jose, CA, that operates the payment systems in the other half of New York City's yellow and green taxis, rolled out its own app, Way2Ride. (That app has since rebranded itself as Curb.)

“takes the iconic New York City taxi ride to another level”

Meanwhile, both Uber and Lyft have been heavily marketing their carpooling features under the belief that riders would like the cheaper fares as well as the supposed environmentally friendly aspects of the service. (Uber’s much-quoted tagline is “more butts into fewer cars.”) But drivers complain that customers routinely express their annoyances with carpool rides by giving them negative ratings.

To be sure, this isn’t the yellow taxi industry’s first flirtation with carpooling. Back in 2002, with the threat of a transit strike looming, city officials floated a plan that would have taxi drivers stop in specific zones to pickup passengers interested in sharing their rides. That plan was delayed until 2009, when the city’s Taxi and Limousine Commission launched a pilot that would equip a select number of yellow cabs with special meters that could handle two or more fares at once.

The experiment never resulted in any industry-wide changes, though, perhaps because, as The New York Times noted, “New Yorkers [were] used to treating their cab as their castle.”