The coronavirus pandemic hasn’t been good for Uber or Lyft, but it’s dealing an even worse blow to taxis.
Uber reported that gross bookings from its rides business declined by 75% in the three months to June compared to last year – tumbling from $12.2 billion to just $3 billion. Lyft, which will no longer be releasing gross bookings figures to its investors, has nevertheless reported a 60% drop in the number of active riders on the platform in the three months to June, from 21.8 million last year to 8.7 million this year.
In New York City, the number of monthly trips provided by both traditional taxis and ride-hailing apps has plummeted since February, according to figures from the New York City Taxi and Limousine Commission.
New Yorkers took just 4.3 million ride-hailing trips in April, at the height of the pandemic, a 79% drop from the 20.6 million trips recorded in January. Taxis saw their numbers fall even further, from 6.8 million trips in January to just around 273,420 in April, a 96% drop.
Ride-hailing apps and taxis both saw a slight recovery after April, with ride-hailing trips climbing to 7.6 million in June, while taxi trips bounced back to 612,840.
As the demand for ridership dried up overall, services like Uber and Lyft have scooped up an even greater share of the market from traditional taxis.
In January – before the pandemic – ride-hailing apps accounted for 75% of taxi trips in New York City. By April, that figure had risen to 94%, with Uber representing 67.6% of all trips and Lyft accounting for a further 24.9%.
While the number of rides in traditional taxis has been increasing from their springtime lows, traditional cabbies’ share of rides has only risen slightly, and to nowhere near pre-Covid levels. By June, ride-hailing apps still accounted for 92.5% of all trips.
It isn’t just New York. In Chicago, traditional taxis saw trip numbers plummet to just 55,620 in April, down 96.2% from April 2019, when they took 1,458,360 trips.
Just as in New York, app-based firms have seen a faster recovery and, as a result, a bigger-than-ever slice of the pie. In June, they accounted for 96% of trips in Chicago, up from 86% a year earlier.
The pandemic is still raging in the US, and it is difficult to know whether ride-hailing services will sustain the gains they have made over their traditional competitors. But the taxi industry was suffering long before the pandemic as ride-hailing apps displaced traditional cabs in cities around the world.
The effects have been profound, and sometimes tragic. In New York City, the price of a yellow cab medallion, which is required to operate a taxi, has dropped from more than $1 million to just $200,000 over the past six years, gutting investments along the way. The uncertainty and job insecurity has been blamed for several suicides among cab drivers.
For those who have continued working during the pandemic, Covid has been a physical as well as an economic threat: In the UK, official figures found that male taxi drivers had higher Covid-19 death rates than medical staff.
There are other factors that make the future particularly bleak for traditional taxi drivers and operators. Many have loan payments to make on their medallions, which have plummeted in value. They also rely heavily on tourists and business air travelers. Yet while passenger airlines will receive billions of dollars in bailouts, the cabs that transport people from airports are not seeing the same level of support.
Uber is facing challenges of its own. Its licence in London, one of the company’s biggest markets, has been revoked over passenger safety concerns. The company is fighting the revocation, with the next court date set for September 14. Its business model faces a significant challenge in the US after a California court ruled the company must reclassify drivers as employees rather than independent contractors. In Latin America, meanwhile, regulations have forced Uber to adopt a more traditional taxi model.
Neither taxis nor ride-hailing apps are likely to see business bounce back to pre-Covid levels any time soon. For taxis, the outlook looks particularly bleak. App-based rides may still be the future, but that future is unlikely to be the one they imagined at the start of the year.
Nicu Calcea is a data reporter at New Statesman Media Group.
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