Tag Archives: uberx

UberX lowers fares 20%

$5:  The new minimum fare on UberX

$5: The new minimum fare on UberX

UberX annouced today that it will lower fares by 20%:

The new fares are:

$3 Base
$1.50/mile
$0.30/minute

with a $5 minimum fare.

This compares favorably to San Francisco taxi rates:

$3.50 Base + first 1/5 of a mile
$0.55 per fifth of a mile ($2.75 mile)
$0.55/minute of waiting or traffic time delay
$2 airport surcharge

Uber claims that they are cheaper than taxis or any other ride sharing system in every city that UberX operates in. There are 24 cities with UberX service.

Moreover, they claim to be cheaper than the bus if you share the ride.

The reason for lowering rates is economies of scale:

The answer is in the network effects of our business. More cars and drivers mean better coverage and lower pickup times. Lower pickup times mean better economics for drivers, and thus more drivers and cars.

Uber getting cheaper means more people will use it for more types of trips, which may help futher decrease costs or improve service, as long as the supply of drivers keeps up with rider demand.

Lyft, sidecar and Uber get a Cease-and-Desist letter from Los Angeles DOT

cease-and-desistPeer-to-peer ridesharing services have already had many legal challenges as they disrupt existing transportation services and work within regulations that were not written with them in mind.

On June 26, Lyft, Sidecar and Uber received cease-and-desist letters from the Los Angeles Department of Transportation (LADOT). (full letters here, here, and here). They already went through a similar situation with the California Public Utilities Commission (CPUC) last year. After negotiating with the CPUC, an agreement was reached in January of this year allowing all three companies to operate in the State of California.

LADOT threatened in the cease-and-desist letter that it would arrest drivers and impound their cars for up to 30 days, although this has not happened yet. All three companies continue to operate in Los Angeles. Lyft is asking anyone who enjoys using their service in Los Angeles to contact key city officials to voice support.

In spite of any California setbacks, Lyft announced their San Diego launch on July 3rd. Lyft now operates in three California cities: San Francisco, San Diego and Los Angeles as well as Boston, New York and Chicago.

Uber experments with Helicopters: UberChopper is born

Last week, as part of a promotion about summer service between New York City and the Hamptons, Uber offered one-way helicopter rides between New York City heliports and the Hamptons. An SUV ride for up to five people to and from the helipads on both ends of the trip was included.

uberchopper

A one-way UberChopper ride for up to 5 people cost a flat $3000, while a ride in a vehicle to the Hamptons was only $300, $400 or $500 for uberX, uber and uberSUV respectively. The helicopter service was only offered for one day (July 3) while the regular uber service to the hamptons will be offered for the rest of the summer.

This is an interesting move for Uber – uberChopper is clearly catering to the uberWealthy while at the new lower uberX rates are catering to the budget-conscious as a cheaper alternative to taxis.

Uber lowers rates in SF, cost is now closer to a Taxi

ubergraphicuber_logo

Today Uber announced that it was lowering its rates in San Francisco by about 10%, effective Jan 21, 2013.  This brings the cost of using Uber in SF closer to the cost of a Taxi.

The minimum fare of $15 did not change, so very short trips will cost the same.  However, most trips will have a reduced price.  The old and new prices for regular Uber (black car) trips in SF:

Old rates New rates
Base Fare $8.00 $7.00
Per Minute $1.25 $1.05
Per Mile $4.90 $4.00
Minimum $15.00 $15.00
Gratituity included included

Uber also launched UBERx for everyone today (it was in private beta).  UBERx is a lower priced version of Uber that uses hybrid and mid-range cars, not necessarily black. UberX rates:

UBERx rates
Base Fare $5.75
Per Minute $0.85
Per Mile $3.75
Minimum $10.00
Gratituity included

For reference, San Francisco taxi rates:

SF Taxi Rates
Base Fare
(includes first 1/5 mile)
$3.50
Per Minute of waiting or traffic delay $0.55
Per Mile $2.75
Airport Surcharge $2.00
Gratuity 15%

I crunched some numbers for a few theoretical trips:

Taxi UBERx New Regular Uber rates
Mission to SOMA
(2 miles, 3 mins of waiting)
$12.25 $15.80 $18.15
Inner Sunset to Marina
(4 miles, 7 mins of waiting)
$21.10 $26.70 $30.35
Golden Gate Bridge to Caltrain
(7 miles, 15 mins of waiting)
$35.65 $44.75 $50.75

UBERx costs 25-30% more than at taxi (including gratuity) while the new regular Uber rates are about 40-45% more than a taxi.  The main benefit of Uber over a taxi is reduced travel time and reduced variability in trip time. By booking a ride through the app, users know exactly how long until their driver arrives to pick them up and can monitor progress in the app.  Unlike with taxis, there is no chance they will abandon you and pick up someone else en route, so you can be certain about when they will arrive.  For many high value trips, the additional 25-45% cost over a taxi may be worthwhile.

There are other benefits of Uber over a taxi:

  • Nicer vehicles
  • Consistently friendly and knowledgeable drivers
  • No cash or payment needed at end of trip (payment is via app and happens automatically)  This speeds up travel time slightly as well.

It should be also noted that Uber launched a new option to request a standard SF taxi through their app.  The trip cost is standard taxi rates plus $1 and 20% gratuity.

Uber is worth trying out for your next high-value trip.  They currently have options in 26 cities and 7 countries, although not all vehicle options are available in all cities (San Francisco tends to get most of them earliest).