When you look up the Uber rate in your city, it looks fairly familiar. There is a base rate, a charge per mile and a charge per minute. It looks like the pricing structure you know well from all the miles you have logged in cabs.
But Uber’s pricing is actually a little deceiving. Taxis charge riders per mile when moving, and per minute when idling. Uber chargers riders per mile AND minute whether they’re moving or idling (except in Philadelphia, where Uber charges per minute only when your speed drops below 11 MPH).
Even so, Uber rates do beat cab fares in most cities. We looked at a sample trip and calculated both costs for a number of different cities. For this analysis, we used fares from UberX, the service where drivers use their own cars. Assume the trip is 5 miles and takes 10 minutes. Also, assume there is no waiting time. The car drives 30MPH the whole way there. Table 1 shows what the fares would look like for a taxi and an Uber car in each city.
The column labelled “Taxi/Uber” shows the taxi fare relative to the Uber fare. If the ratio is over 1, as it is everywhere except New York and Philadelphia, that means that Uber is cheaper than a cab — that is, until surge pricing reaches that level. In L.A., an Uber car is cheaper for this sample trip even with surge pricing up to 1.7x.
It’s also important to note that you don’t have to tip your Uber driver. And most people do tip their taxi driver. If you add a tip of 20% to the cab fares, Uber looks like an even better deal and beats out taxis in every city we analysed. See Table 2.
How do the fares change for different kinds of trips? Well, let’s look at the same 5-mile route with no idling and assuming you tip your cab driver 20%. But let’s change the speed of travel. Uber prices drop as speed increases, which makes sense as Uber is charging you for the miles and the driving time. If you are only going 15-20 MPH, then a taxi is cheaper in New York. But as speed increases, Uber becomes a better deal.
Now add some waiting time. This is when cabs start charging you per minute, waiting for lights to change or in stop and go traffic. Assume 5 miles and 20 MPH when you are moving. As idle time increases, the fares of both increase at a similar rate. So idling time doesn’t seem to impact whether you should take a cab or an Uber car.
VERDICT: Factoring in a tip, if you are in New York City and there is a ton of traffic (meaning you can’t go over 20 MPH), a taxi is best. Otherwise, Uber seems to be cheaper. But watch the surge levels, because 2x is more expensive than a cab in almost any city.
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