An Uber Is Cheaper Than A Taxi (Except When It's Not)

Rideshare companies boost prices more often that you might think

Ride-hailing apps like Uber, Lyft and Sidecar like to claim that they're cheaper than taxi cabs. If you're in one of the 25 markets where Uber cut prices by 25% last summer, it's probably a patently true claim. NBC Bay Area reporter Sam Brock checked prices in and around San Francisco last summer and found that UberX prices easily beat out taxi cabs, especially for longer trips.

Pretty much the only time when taxis might be cheaper than a ride-hailing service is when "dynamic pricing" is in effect. Better known as "Surge" pricing (or "Prime Time" for Lyft users), the ride service companies regularly increase prices during times of high demand. A fascinating blog post from the people who make What's the Fare showed that price increases happen more than you might think, making ride-hailing apps a bit less thrify than they seem.

Here's a chart they drew up showing how many rides each day are "normal" (in blue) and how many are are in "Surge" or "Prime Time." [[280815822,C]] On some days more than half the rides are price-increased.

What's the Fare is a website that estimates and compares prices and travel times for users of Uber, Lyft, Sidecar and yes, taxis. The site's creators, Jonathan Goldman and Matthew Liu, used to work on software and product at companies like Youtube and Bonobos. They're currently working on a not-yet-launched business in the transportation space, and launched What's the Fare as a side project. The site was only launched in early September, but was shared widely on sites like Hacker News and Lifehacker, sending more than a hundred thousand users to the site in just a few weeks. The two used data from these thousnads of requests to compare the ride service companies at different times and price levels.

Yet, even with the dyanamic pricing, the pair concluded that taxis lose out most of the time:

The results are quite clear. In the overwhelming majority of cases, even with dynamic pricing at least one ride-sharing service offers a lower price than a taxi almost all the time in San Francisco and Los Angeles, and 85% of the time in New York.

What's the Fare found that maybe the one place where taxis do have a bit of an edge is in the weekday commute. Unsurprisingly, prices for Uber and Lyft are higher on weekday mornings and evenings: [[280816072,C]] Of couse, availability is another issue. In a separate post, the site mapped dynamic pricing in San Francisco neighorhoods. The darker color means a higher incidence of price increases by Uber or Lyft. This screencap shows the commute for a Monday morning, but you can select different time periods on their posted interactive. [[280816372,C]] I find the geographical data more telling than the pricing information. In What's the Fare's map, the expected places light up in red: Downtown, SoMa, the Mission. But there's also some surprises, namely the Richmond and Presidio Heights. These are places where it's a lot harder to get a taxi and where a taxi driver might be less willing to go, for the difficulty of finding another fare.

The map brings to mind Cabspotting, a unique project the Exploratorium took up a few years ago to track and map taxis in real-time. [[280816552,C]] The map, made by Stamen Design, depicts taxis as a series of ghostly threads that appear brighter and sharper where they travel more often. The city has a bright, active center downtown and in SoMa but rapidly fades the farther you look west or south.

It's worth mentioning that there are considerations other than price. Despite recent legislation, drivers for ride-hailing app companies don't have the same levels of commercial insurance that licensed taxi drivers have. And it's actually illegal for companies like Uber and Lyft to operate at many airports. An NBC Bay Area investigation showed that drivers routinely broke the law with their company's blessing. Soon after that story, Uber and Lyft both secured agreements with SFO but they may not have the right permissions with airports in other markets.

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