Since Uber uses a pricing structure similar to traditional taxicab companies, its prices vary depending on what city you’re in, how far you’re going, and/or how long it takes to get there. Some of these will also be dependent on what level of Uber service you choose (see our UberX vs. UberSelect vs. UberTaxi vs. UberBlack article).
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In addition, you may be charged extra if:
Your driver has to pay for driving on toll roads, picking you up or dropping you off at the airport, or finding a parking spot
You (or people/pets under your care) cause significant cosmetic or physical damage to your driver’s car (usually between $50 and $200, depending on the extent of the damage)
You live in the U.S. or Canada, where a “Safe Rides Fee” helps Uber pay the operational costs of making sure that their drivers and app meet acceptable safety standards
Inclement weather, special events, or otherwise high demand for Uber taxis causes “surge pricing” (see our Uber Surge Pricing article for more information)
So how much does Uber cost?
On average, an Uber fare costs $24 U.S. However, this is an average across all of its service areas and service tiers. So if, for example, you only use the UberX service, which is Uber’s least expensive service tier, then your fares may be significantly cheaper (usually more around $10).
How much does an UberX cost, on average?
As an example, we’ll look at the costs for requesting an UberX (the least expensive tier of Uber service) car in five major American cities. Their rates are as follows:
Los Angeles, CA: $0 base fare, $0.18/minute time cost, $1.00/mile distance cost, $4.65 minimum fare.
New York City, NY: $3 base fare, $0.40/minute time cost, $2.15/mile distance cost, $8 minimum fare.
Grand Rapids, MI: $1 base fare, $0.15/minute time cost, $0.75/mile distance cost, $4.55 minimum fare.
Austin, TX: $1 base fare, $0.18/minute time cost, $1.10/mile distance cost, $2.30 minimum fare.
Denver, CO: $1 base fare, $0.16/minute time cost, $1.10/mile distance cost, $4.95 minimum fare.
As you can see, more densely-populated cities tend to have higher Uber fares, and the opposite is true for smaller cities. You can check what the fares for your area will be by visiting https://www.uber.com/cities and clicking on the name of the city or urban area closest to you. Then, scroll down and click on the tier of Uber service that you want the rates for.
Is Uber cheaper than a taxi?
Uber is usually a little bit cheaper than taking a traditional taxi. In most cases, Uber fares can be up to 40% cheaper than traditional taxi fares. In some cases, though, Uber fares can be almost double what they are for taxis, when you factor in extra costs. This is especially true when “surge pricing” is in effect.
According to Uber, though, even if your fares are higher than with traditional taxis, there are still benefits to using Uber. These benefits revolve around how much time and risk you save by using Uber, especially in crowded urban areas like Uber’s headquarters of San Francisco, California. Consider the following:
You can have an Uber taxi pick you up pretty much anywhere that is convenient to you. With a traditional taxi, you usually have to meet one or flag one down in a busy urban area. This not only likely increases the amount of time that it takes for the taxi to get to you, but it also likely inconveniences you because you have to walk through an area with lots of other cars (which can be unsafe and time-consuming).
Uber taxis usually show up faster than traditional taxis. 95% of Uber taxis show up less than 15 minutes after a ride request is made, and nearly all of them (99.98%) show up in less than 30 minutes. The average taxi rates for these two times are 27% and 63%, respectively. If you’re looking to flag a taxi down instead of calling for one from dispatch, those rates climb to 59% and 88%, respectively… but they’re still not better than Uber’s numbers.
Uber is more reliable (or at least more honest) when it comes to whether or not your taxi actually arrives. Over 35% of all traditional taxis called from dispatch never actually make it to their pick-up points. With Uber, if there is no driver currently available in your immediate area, you will be informed of this, and your ride request will not be accepted. Plus, if you do successfully complete a ride request, you can also use the Uber app to track where your taxi actually is.
When you finish riding in a traditional taxi, you have to spend time fumbling around in your wallet or purse for money or a credit card with which to pay your fare. With Uber, your driver will use the Uber app to automatically charge the credit card on your Uber account, so you can just get out and go!
How does Uber make money?
Uber makes money using a commission-based system. Passengers pay fares based on how far and how long they travel, and then Uber takes a 20% commission from the driver’s earnings for each ride that they complete. Some additional fees, such as “Surge Pricing”, increase passenger fares and, thus, Uber’s earnings.
Also, like many other technology start-ups (like us here at Techboomers!), Uber got the money they needed to get going from investors who liked their idea, including Google, First Round Capital, and popular Chinese search engine company Baidu.\
That’s a bit of information about the costs and financial workings associated with Uber!