Uber Technologies Inc. will list New York’s yellow taxis on its app, the first alliance of its kind in the U.S. and an effort to ease a driver shortage and pressure on fares. 

The ride-hailing giant reached a deal with the New York City Taxi & Limousine Commission’s technology partners, Creative Mobile Technologies and Curb Mobility, the companies said in separate statements on Thursday. Their apps, Curb and Arro, power 100 per cent of the city’s yellow taxis and will now allow riders to book trips in taxis through the Uber app. 

The partnership will be piloted in the spring and roll out more widely in the summer. Uber shares rose 2.5 per cent to US$33.87 in New York. 

“This is a real win for drivers. No longer do they have to worry about finding a fare during off-peak times or getting a street hail back to Manhattan when in the outer boroughs,” said Guy Peterson, Uber’s director of business development. “And this is a real win for riders who will now have access to thousands of yellow taxis in the Uber app.”

Uber and rival Lyft Inc. have been struggling for months with a driver shortage that has pushed up fares and wait times for customers. Last summer, as ridership surged with the easing of COVID restrictions, Uber and Lyft scrambled to recruit enough drivers back to their platforms after many found other work or relied on government stimulus checks instead. Just as it seemed that drivers were returning after the wave of omicron infections, surging gas prices around the country have squeezed earnings, prompting some to reconsider working on the apps once again. 

Uber said it hasn’t seen a decrease in the number of active drivers on the platform since fuel prices have surged and in fact has more drivers on the app in the U.S. now than at any point during the pandemic.

But average charges per mile during the week ending Feb. 27 were 18 per cent higher than in January 2021, reflecting the ongoing driver shortage, said YipitData analyst Peter Martin. Ride-hailing pickup times increased by more than 50 per cent in March compared with October, with Lyft seeing shorter wait times than Uber, according to an RBC Capital Markets analysis. 

The partnership could help Uber significantly boost supply and reduce wait times, which “could increase its slice of the ridesharing market vs. rival Lyft.” Bloomberg Intelligence analyst Mandeep Singh wrote in a note.

Taxis will be offered to Uber customers at the same price as an UberX for the same ride. Prices may be lower or higher than a metered cab fare, depending on whether surge pricing is effect, said Jason Gross, vice president, head of mobile, at Curb. Drivers will also be able to see fares prior to accepting a ride, he said.

The alliance marks something of a reconciliation for the city’s iconic yellow cab drivers and Uber, which launched in New York more than a decade ago. The San Francisco-based company’s arrival spurred a collapse in demand for yellow cabs that deflated the value of taxi medallions. The beleaguered taxi industry has struggled to recover with many cab drivers -- saddled with debt to purchase permits -- pushed into bankruptcy.

Uber already has partnerships with taxi companies in other countries, from Spain to Colombia. In some markets, like Hong Kong and Turkey, cabs represent the company’s primary market.