Yellow cab drivers are using this app to compete with Uber

Riding a self-driving Uber around San Francisco
Riding a self-driving Uber around San Francisco

He may drive a yellow taxi, but Mario Sanchez relies heavily on technology to guide his decisions.

Sanchez uses StreetSmart, a new app that predicts the best routes for drivers to find customers using troves of data and artificial intelligence.

It's no secret that Uber and Lyft have changed the landscape for New York City taxis. That's why Sanchez, who drives up to 60 hours a week, agreed to be the first test user of StreetSmart in 2016.

"The industry is changing, we have to adapt," Sanchez told me, as I sat shotgun in his cab last week. "You went from making money hand over fist -- and now you have to work for it. You have to try new things."

According to Sanchez, who drives one of New York City's 13,587 taxis, the app has helped him maintain -- and increase -- his income at a time when there's more competition than ever. Uber has more than 50,000 drivers in New York; Lyft has around 30,000 (many drivers work for both companies).

StreetSmart collects and analyzes historical data on popular pickup and drop off locations, as well as traffic, weather and mass transit schedules. It uses machine learning algorithms to predict the best route for drivers to take at a given time, and gives the estimated time it'll take to get to the next passenger.

StreetSmart recently struck up a partnership with Verifone (PAY) in New York City. As part of that, Verifone is turning over trip data to bolster StreetSmart's algorithms. In the coming months, Verifone, which owns taxi meters, card readers and taxi TVs on roughly 60% of NYC's cabs, will integrate StreetSmart into its new driver dashboards. That means drivers won't have to download the app on their phones to use the service.

Verifone has been working to innovate within the cab industry. In 2015, it acquired startup Curb to make it easier for riders to hail cabs from an app as they would an Uber. But according to Jason Gross, Verifone global head of product and marketing, working with StreetSmart is an important new step in helping drivers be more informed about what remains the biggest share of business for taxis: Street pickups.

Related: Uber's PR crises show no sign of letting up

"We thought, 'How can we make that more efficient, reduce their down time and make it quicker for passengers on the street?'" Gross told CNNTech. "[StreetSmart's] ability to manipulate data was of interest to us."

street smart instrory

For drivers like Sanchez, StreetSmart has been easy to use. He taps a button when he's free and is shown a suggested path to quickly find his next passenger.

"It makes me go down streets I've never been down before," said Sanchez, who was born and raised in the Lower East Side. Once he picks up a passenger, he'll tap a button to indicate he's busy.

StreetSmart doesn't provide directions once drivers have picked up passengers, but many drivers know their way around New York's streets like the back of their hands.

In speaking with cab drivers while developing the product, cofounder Asaf Roz said they found most drivers were making decisions based on misconceptions or past experiences. Airport rides are considered by many drivers to be "the holy grail," Roz said, but drivers may wait two hours after dropping off an airport ride due to the amount of drivers there. "Drivers aren't making enough money and they're oftentimes driving around empty," he said.

Related: Uber top self-driving car exec steps aside

Early results are promising, according to Roz, who said the startup conducted a pilot program with a "few dozen" drivers in New York City. Over a three-month period, those using the app saw a 15% increase in their income and were occupied 22% more of the time compared to drivers not using the app.

For now, StreetSmart is working on acquiring customers. There are currently about 500 people using its service, said Roz, who is based in Tel Aviv. Newer drivers like Sanchez, who has been driving a yellow cab for five years, are more inclined to try out the service, he added. That's why StreetSmart is working with LaGuardia Community College, the largest and oldest TLC school in NYC, to introduce freshly minted drivers to its app.

Roz, who said he's raised $2 million in funding for StreetSmart, said the company is "platform agnostic," which means yellow cab drivers aren't the only potential beneficiaries of its product.

The company plans to get e-hailing companies on board. StreetSmart can integrate into other dispatch systems like Uber or Lyft to help fleets anticipate demand and maximize their combined efficiency.

"We understand the market is changing," said Roz.

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