Uber just announced a partnership that will allow New York City users to take taxis on its platform. In a crowded marketplace, will this “if you can’t beat ‘em, join ‘em” strategy prove successful? In today’s Insight Flash, we take advantage of our ability to drill down into the New York City CSA to take a look at how market share has evolved recently in Ground Transportation, how demographics align between Uber and NYC taxis, as well as how loyal riders are based on cross-shop rates.
Pre-pandemic, Uber held a substantial market share among those living in the New York-Newark CSA. It captured about a third of total spend on credit and debit cards, similar to the share of payments by drivers to E-ZPass. During the pandemic, concerns about mass transit and shared vehicles drove riders to their own cars and brought E-ZPass’s share of spend as high as 61% in 2Q20. Although that share has been declining, it was still north of pre-pandemic levels at 42% in 4Q21, while Uber’s share was within its pre-pandemic range at only 28%. Meanwhile, although cash payments may cause CE Transact data to understate NYC Taxis’ spend share, among those using cards for taxi rides directly and via the Curb app, spend share dropped from 4.2%-5.6% in the quarters before the pandemic to only 1.9% in the most recent quarter.
Top Ground Transportation Credit and Debit Card Spend Share
Interestingly, taxi usage seems to be most appealing to both the highest and lowest income groups in our panel. 6.5% of those making over $150,000 used a credit or debit card to pay for a taxi in the last three years, as did 8.6% of those making $20,000-$40,000 and 9.6% of those making under $20,000. These dynamics are very similar to Uber’s. However, the taxi sweet spot for age appears to be among 25-34 year olds, 12.0% of whom used a credit or debit card in a taxi in the last three years, while Uber is most popular among 18-24 year olds, 52.6% of whom used the service in the same period.
Demographics Among Credit and Debit Card Spenders
One interesting thing to note that is likely a key pillar of Uber’s strategy is that those using multiple ground transportation services tend to be heavy spenders across the board. In the last year, Uber riders used a credit or debit card for 10% more NYC Taxi trips than the overall NYC Taxi passenger. And even more importantly, NYC Taxi riders took over twice as many Uber rides as the average passenger. More access to these customers (who also took 75% more Lyft trips than the average rider) could help Uber strengthen its market-leading position.