Uber is crushing the taxi industry that has dominated New York City--and other cities--for so many years.
Data from the Taxi and Limousine Commission analyzed by the New York Daily News shows total trips in the first half of 2015 were down 10 percent to 77 million, compared to same period last year. Revenues from yellow cab fares have declined as well. And in July, there were 100,000 Uber trips in New York City per day, a 4x increase from last summer.
It's hard for taxis to compete with Uber, the ubiquitous car-hailing service said to be raising an additional $1 billion round of funding at a $60 to $70 billion valuation.
But a new startup called Karhoo is hoping to give taxi drivers in several cities a leg up.
Karhoo, a 10-month-old startup that won't launch until January 2016, has raised a $250 million round of funding, with plans to raise more than $1 billion in capital. Karhoo works with licensed taxi companies to let you hitch a ride from any number of taxi services, the FT reports.
In New York City, Karhoo is working with for-hire vehicle companies like Dial 7 and Carmel. In the UK, it's partnering up with minicab company Addison Lee. Karhoo will launch in three cities in January: New York, London, and Singapore.
Its investors so far include Nick Gatfield, the former CEO of Sony Music Entertainment, and David Kowitz, the cofounder of hedge fund Indus Capital Partners.
“[Uber] can’t subsidise prices forever; they have to be profitable, especially if they want to IPO. We can go in and we can level the playing field," Karhoo founder and CEO Daniel Ishag told the FT.
New York City is one of Uber's largest markets; the company generates hundreds of millions of dollars of revenue there. And the taxi industry in the city is feeling the burn from Uber's presence.
In August, Gothamist published a story about the increasing number of abandoned taxis piling up on the streets of Brooklyn outside of taxi dispatchers.
Hossam Yossri, who also works at McGuinness Management in Greenpoint, Brooklyn, told Gothamist that taxi drivers keep quitting, abandoning their vehicles to defect to Uber. He says drivers are jumping ship to Uber because they don't have to worry about paying a lease or interacting with a dispatch.
Gus Kodogiannis, who opened McGuinness Management almost 30 years ago, said: "Honestly, yes, it's Uber. We've lost 40% of our business in the last year and a half."
Earlier this year, a bill that would cap the number of for-hire vehicles given permits--including the cars of people who drive for Uber and Lyft--was defeated after vocal protests by Uber drivers and its supporters. Instead, the city announced a plan to study the effects of for-hire vehicles such as Uber on congestion in Manhattan.
Karhoo isn't the only startup to band together taxis to take on Uber, but it may be the most well-funded. Arro, which launched last month in NYC, connects users with taxis in New York, promising no surge pricing.
Stiff competition has also caused the relative value of taxi medallions to plummet. In 2013, a taxi medallion was worth an estimated $1.3 million. Today, online listings range from $600,000 to $900,000.
Medallion owners are in a frenzy to protect their assets. The largest single owner of medallions, Gene Friedman of Taxi Club Limited, recently filed for bankruptcy, telling the Observer that the city was unwilling to work with him as the value of his medallions plummeted.