Uber is vaporizing the taxi industry - so a new startup is raising $250 million to help cabs compete

Uber is crushing the taxi industry that has dominated New York City - and other cities - for so many years.

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.

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