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Transportation The Almighty Buck

Uber Is Now Cheaper Than a New York City Taxi 139

Posted by samzenpus
from the penny-pinching dept.
redletterdave writes Uber announced in a blog post on Monday it would cut the prices of its UberX service in New York City by 20% — but it's only for a limited time. Uber says this makes it cheaper to use UberX than taking a taxi. Consumers like Uber's aggressive pricing strategy but competitors — and some of its own drivers — are not as happy. UberX, Uber’s cheaper service usually hosted by regular people driving basic sedans rather than fancy black cars, also cut its rates by 25% last week in the Bay Area, including San Francisco, San Jose, and Oakland. As a result of that announcement, Uber said its service was effectively “45% cheaper than a taxi.”
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Uber Is Now Cheaper Than a New York City Taxi

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  • And in other news (Score:5, Informative)

    by OzPeter (195038) on Monday July 07, 2014 @04:02PM (#47402345)

    The amount of insurance carried by Uber drivers is also probably much less than NY taxis.

    • Re:And in other news (Score:5, Informative)

      by NotDrWho (3543773) on Monday July 07, 2014 @04:16PM (#47402475)

      Not to mention that Uber drivers probably aren't paying as much as $1 million [nytimes.com] for a single taxicab license.

      • by JcMorin (930466)
        That's a nice starting advantage!
      • by Xicor (2738029)

        having to pay for a license to drive ppl around is ridiculous. in england, in order to be a taxi driver, you have to take a test saying you know at least 90% of the roads.... this is just plain dumb... we have gps for that.

        • That's only for one limited elite class of taxi drivers, the London Black Cab driver.

          The exam you're referring to is called "The Knowledge". Minicab (pre-booked hire car) drivers in London do not need "The Knowledge", but driving a black cab has a certain cachet that means they can charge higher fares - you know you're getting a driver that knows his way around beyond the cold and unadorned data that a GPS navigator can provide. The privilege for this differentiation is that only licensed taxi drivers are a

    • Re:And in other news (Score:5, Informative)

      by jratcliffe (208809) on Monday July 07, 2014 @04:17PM (#47402483)

      NYC Taxis have to carry $100k (per person) / $300k (per incident) liability insurance. That's the same for Uber drivers.

      http://www.nyc.gov/html/tlc/do... [nyc.gov]

      • by OzPeter (195038)

        Uber drivers are covered by a lot less when they are looking but have not accepted a fare.

        • by silfen (3720385)

          No, that's wrong. When they are not carrying passengers, they simply have lower legal requirements, but their actual coverage is likely higher than the minimum legal requirements.

          And what difference does it make anyway? Why shouldn't the same insurance rates apply to everybody, simply based on mileage, driving history, and vehicle type? I mean, if I wanted to pick out a category of drivers to charge more, it would be mothers with children in their cars (they are dangerous), not Uber drivers looking for ride

          • by cheesybagel (670288) on Monday July 07, 2014 @05:27PM (#47403021)

            Remember that adage that 90% of car accidents happens 5 minutes away from the departure point or 5 minutes before the arrival point? Guess what a taxi service is constantly doing...

            • Remember that adage that 90% of car accidents happens 5 minutes away from the departure point or 5 minutes before the arrival point?

              No, because that is nonsense. The actual* figure is 52% (not 90%) of accidents occur withing 5 miles (not five minutes). But that is not because driving within that radius is particularly dangerous, but simply because most driving occurs within that radius.

              * This figure comes from a survey [progressive.com] conducted by Progressive Insurance in 2002. Many articles attribute the study to the NHTSA, and often exaggerate the percentage, or the distance, or both.

              • by mythosaz (572040)

                To tack on... ...I explain this to my wife constantly. The reason most accidents happen close to your home is exactly as you said -- most driving occurs close to your home. I use it as a reason to have her buckle up even for short trips, but it's also a lesson in our house about manipulating statistics.

                Coming up next, the percentage of American's that live "near" water.

          • by SethJohnson (112166) on Monday July 07, 2014 @05:31PM (#47403049) Homepage Journal

            Why shouldn't the same insurance rates apply to everybody, simply based on mileage, driving history, and vehicle type? I mean, if I wanted to pick out a category of drivers to charge more, it would be mothers with children in their cars (they are dangerous), not Uber drivers looking for rides.

            Consider the scenario where you are standing on a street corner and a car comes rushing towards you at a high rate of speed. Collision is imminent. You're going to survive the impact, but you'll be paralyzed from the neck down for the rest of your life.

            If the car that crippled you was operated by an employee of a cab company, it might mean that a legal settlement would be reached such that you'd spend the rest of your life at your house with inhouse nurse care.

            If the car was an Uber driver rushing down the street to pick up a customer before becoming inpatient and choosing a different car in the app, well, I hope you have substantial insurance through your own job. When you attempt to sue Uber over your injuries, they'll say they have no liability in the matter because their driver wasn't on the clock with a passenger. And they'll exert significant legal resources to prevent creating a precedent that'll put them out of business. They'll happily spend more fighting your case than the amount for which your suing. In this scenario, you're likely to have to live at an institution to be provided needed medical care for the rest of your life.

            As for your stereotyping of mothers with infants, the most common cause of car accidents is distracted driving due to cellphone usage [marketwatch.com]. Seems that Uber drivers looking for fares would strongly fit into that category....

            • by countach (534280)

              I don't know how it is in the US, but in some countries, all drivers must be insured against hurting third parties. You lament about how if an Uber driver hits you they are less insured than a taxi. That's cold comfort when 99% of the cars are neither a taxi nor Uber, yet they might hit you.

            • by Anonymous Coward

              What difference does it make if it's an Uber driver or any other driver who paralyzes you? If you think this is a serious problem, then insurance limits need to be raised for everybody, and/or get yourself disability insurance if your state doesn't already require it (many do).

              But instead of making that argument, you pick some small group of people and try to stick it to them. I wish you sincerely that you'll be at the receiving end of such stupid knee-jerk legislation yourself.

              And if you think you can get

              • What difference does it make if it's an Uber driver or any other driver who paralyzes you?

                Difference being that Uber is sucking up around $213,000,000 per year by avoiding significant insurance coverages that their competitors are having to pay. They're offloading this chunk of the insurance burden on their 'independent contractors' who are not able to cover injuries like a $1 Billion / year revenue company can.

                What does it matter? It's the difference between being compensated properly for a life-chan

                • by MrL0G1C (867445)

                  In the UK all drivers must have insurance by law which is minimum 1 million public liability. Is this not true in the US? And if insurance is mandatory then insurers should have rules re hiring out their car, if they don't then it's their own fault if they have to pay out, that's how insurance works.

                  • by EvilJoker (192907)

                    Each state has its own rules on that issue. Most have pathetically low requirements (a quick Googling shows that most places require $50k)

                    That being said, I believe $100k/$300k (injury per person/total injury per accident) is the typical policy

              • by bloodhawk (813939)

                The difference is the actual time spent driving. someone driving to make money is spending 6-8 hours or more on the road and as such their risk of being in a serious accident increases accordingly and thereby the risk they pose to the insurance company. Professional drivers or those that provide public transport are normally charged extra to accommodate for the extra risk and costs associated with that risk.

            • by mi (197448)

              If the car that crippled you was operated by an employee of a cab company, it might mean that a legal settlement would be reached such that you'd spend the rest of your life at your house with inhouse nurse care.

              And it would be even better, if the taxis are all government-owned — in which case you'll get a truly gold-plated care, will you not? Heck, some of the poor may choose to stand on busy intersections just for that reason — would not that be terrific?

              Do I hear a proposal to nationalize al

        • Uber drivers are covered by a lot less when they are looking but have not accepted a fare.

          Not in NYC. Same insurance requirements, since they're all regulated livery car drivers.

      • by vux984 (928602)

        Around here, you also have to declare and insure for a 'purpose', not just a liability amount. After all, $1 million dollar liability on a sunny summer weekends only car is less than the same risk as a Taxi.

        Around here, there is, in order of increasing cost:

        Pleasure (pleasure use only, a couple days per month commuting are ok)

        Commuting (driving to and from work, not "for work" itself - different sub classes depending on how far you commute)

        Business (drive for work, meeting customers etc)

        Delivery -- For the

        • Around here, you also have to declare and insure for a 'purpose', not just a liability amount. After all, $1 million dollar liability on a sunny summer weekends only car is less than the same risk as a Taxi.

          Around here, there is, in order of increasing cost:

          Pleasure (pleasure use only, a couple days per month commuting are ok)

          Commuting (driving to and from work, not "for work" itself - different sub classes depending on how far you commute)

          Business (drive for work, meeting customers etc)

          Delivery -- For the delivery class there are sub classes depending on what type of vehicle, and what is being delivered. Pizza drivers need this I know from personal experience. And I bet anything that 'delivering people' or 'taxi' insurance is in here to, that uber drivers would be required to have it, and that many do not.

          Again, in NYC, Uber drivers carry the same insurance that taxis or any other livery car driver carriers. It's commercial vehicle insurance.

          • by vux984 (928602)

            Uber drivers carry the same insurance

            I'm not questioning if they *should*; I question whether they DO.

            • by Rockoon (1252108)

              I'm not questioning if they *should*; I question whether they DO.

              ..and you've been told more than once that they do.

              That doesnt seem to have stopped you from continuing to be in the "question" state instead of the "answered" state.

              • by vux984 (928602)

                ..and you've been told more than once that they do.

                Ah well, that's settled then.

                Then again...

                âoeI went to Geico, filled out an application and told them I was going to transport people,â he says. âoeThe application was declined as âundesirable.â(TM)â

                [...]

                You can see my dilemma. It seems to me the only way to comply with Uber by getting personal insurance would be to misrepresent my use of the vehicle, which I do not feel comfortable with. My conclusion from this indicates that

            • Again, Uber in NYC is different. All their drivers (including UberX drivers) have commercial licenses, and are driving Taxi & Limo Commission certified cars, with commercial plates.

        • by EvilJoker (192907)

          Pleasure is usually the catch-all for when your needs don't really fit into any other category. It implies joyriding, and is one of the most expensive.

      • by mjwx (966435)

        NYC Taxis have to carry $100k (per person) / $300k (per incident) liability insurance. That's the same for Uber drivers.

        But how much do you want to be that UberX drivers dont have that level of liability insurance. Here in Australia private car insurance (the kind everyone has on their car) does not cover business use, so if you're using your car for mini-cabbing (Uber isn't new, it's just Mini cabbing with a web 2.0 interface) your insurance wont cover you (also in my state, you're driving an unregistered vehicle because with private registration you get a tax cut off the cost of business rego). But Uber will flounder and

        • Again, in NYC (not everywhere, NYC is the exception), Uber drivers, including UberX, have to have commercial licenses, and their cars have commercial plates. They also have commercial insurance.

      • by MrL0G1C (867445)

        That's rather low, UK car drivers insurance covers £1m minimum which is currently about $1,7,100,000.

    • Re:And in other news (Score:4, Informative)

      by stephanruby (542433) on Monday July 07, 2014 @05:54PM (#47403229)

      Not according to Uber's web site [uber.com].

      If you’re taking a ride requested through UberBLACK, UberSUV, or uberTAXI, your livery or taxi transportation provider carries a commercial insurance policy in at least the minimum amount required by local regulations. If you didn’t get his or her insurance information at the time of the accident, please reach out to us so we can connect you.

      If you’re taking a ride requested through uberX, some transportation providers are rideshare drivers providing transportation with their personal vehicles. Rideshare providers carry personal insurance policies. In addition, there’s a commercial insurance policy with $1 million of coverage per incident. This policy covers drivers’ liability from the time a driver accepts your trip request through the app until the completion of your trip. This policy is in addition to the driver’s own policy, but it acts as primary insurance if the driver’s policy is not available for any reason. An additional insurance policy covers drivers when they are logged into the Uber app but are not currently on a trip.

      There is also uninsured/underinsured motorist coverage (UI/UIM) of $1 million per incident for bodily injury, in case another motorist causes an accident and doesn’t carry adequate insurance. So, for example, injuries caused by a hit-and-run accident would be covered by the UI/UIM.

      For additional information, visit our blog: blog.uber.com/ridesharinginsurance

    • by jythie (914043)
      Yeah, it is easy to offer lower prices when you get to skip over the costs other people pay. It is the same reason child and slave labor are still popular.
      • by Rockoon (1252108)

        Yeah, it is easy to offer lower prices when you get to skip over the costs other people pay.

        Its easy to prevent competition when you jack up the cost that other must pay to insane levels such as $1 million per medallion.

        Let taxis suffer the regulatory capture that they themselves created. There is no reason for anyone else to suffer it.

        • by jythie (914043)
          On the other hand, those rules reduced the number of taxis and congestion in NYC. There is a real game theory problem here in that any one company wants as many of its own cars in the field as possible, but if every company is doing that the roads get worse then they are. Uber is not feeling this too much since they are still pretty small, but the original problem is still there. Too dense a population, not enough road, and too much individual profit to be made.
    • by mi (197448)

      The amount of insurance carried by Uber drivers is also probably much less than NY taxis.

      If this fact does not bother you, when you are getting a free ride from an acquaintance, it should not bother you, when you are riding Uber(X).

      And if it still bothers you anyway, well, just hail an "official" cab.

      • If I am hit by your acquaintance while they are giving you that free lift, their private insurance will cover my medical bills for as long as needed.

        If I am hit by a taxi from a regulated company, their business insurance will cover my medical needs for as long as needed. The fact that they have adequate insurance is something that is checked by the taxi licensing people.

        If I am hit by an Uber driver, well who knows how much insurance they have - Uber covers them for $1Million but that doesn't necessarily

        • by mi (197448)

          If I am hit by your acquaintance while they are giving you that free lift, their private insurance will cover my medical bills for as long as needed.

          No, actually. Auto insurance policies have caps on them — $1mln is very common for private cars. Rich people are encouraged to pay for additional coverage (so as not to loose their house to a litigious victim), but it is not mandatory.

          If I am hit by an Uber driver, well who knows how much insurance they have

          The "who knows" argument — also known as s

  • What? (Score:4, Interesting)

    by ottothecow (600101) <ottothecow@NosPam.gmail.com> on Monday July 07, 2014 @04:02PM (#47402347) Homepage
    It was more expensive than a taxi in NYC?

    Every other city I have used it in, UberX was at a fair discount to a regular taxi...after all, why would you hop a ride in some random person's car (whom you will have to provide with directions because they don't know the city) if it costs more than an actual taxi service? The only thing more expensive was the black car (limo) service.

    • Re:What? (Score:4, Informative)

      by MindStalker (22827) <mindstalker&gmail,com> on Monday July 07, 2014 @04:11PM (#47402427) Journal

      It appears so.
      http://www.taxiautofare.com/us... [taxiautofare.com]

      I didn't know taxi fare in NYC was so reasonable. I guess there is more competition in NYC. They also make up for it in quantity. Many other places the taxis sit around waiting for fares much longer.

      • Re:What? (Score:5, Informative)

        by bws111 (1216812) on Monday July 07, 2014 @04:53PM (#47402755)

        Cab fares are regulated in NYC. Competition has nothing to do with it. http://www.nyc.gov/html/tlc/ht... [nyc.gov]

        • Re:What? (Score:5, Interesting)

          by mjwx (966435) on Monday July 07, 2014 @08:36PM (#47404179)

          Cab fares are regulated in NYC. Competition has nothing to do with it.

          Shhh,

          If you listen carefully you can hear the Randian's heads pop.

          Everywhere I've travelled, the less regulated the taxi industry the more they take the piss and rip off customers. Thailand is a good example, in Bangkok taxis are cheap. From the Airport to the city centre is 400 Thai Baht + 70 Baht in tolls (approx 30 Baht == 1 USD), that's a distance of 35 KM and includes an airport fee. Taxi's are well regulated in Bangkok (its the same story in Singapore).

          In Phuket, a taxi wont even turn on the engine for less than 200 Baht, it's less than that to get into a taxi in Australia. Taxi's aren't regulated at all, they operate like a Mafia using violence against their competition, ripping off customers. They sit there all day turning down paying customers because they aren't paying enough. The local Phuket govt isn't interested in doing anything (since the recent coup in Thailand, I've heard the army has been attempting to clean the taxi mafia up).

          • There is a difference between regulation and anti-corruption.

            Uber is showing that a deregulated system can work. You need true competition though and a government to enforce anti-monopoly policies and crack down on mafia corruption. Many cities over regulate the taxi industry and limit the number of cabs to a ridiculously low number to keep prices high. In your other case a mafia (a semi governmental entity in itself) is doing the same thing. //Randians are crazy, but there certainly is room for balance.

            • by mjwx (966435)

              Uber is showing that a deregulated system can work.

              Not really.

              What Uber is trying to do is operate outside the law.

              Because of this, Uber is one serious accident away from complete failure, doubly so in Australia. One serious crash and the insurance companies will come for blood. They'll pay out to the victims (including the passenger, but not the driver) and then come after Uber itself for compensation. That billion dollars in capital wont last long.

              Uber is not a new idea, it's what is called "m

      • by saikou (211301)

        Plus don't forget the "surge pricing" which, for some reason, always happen when you actually want to use the Uber :P As in, when it's raining, holiday, blah-blah

    • by AvitarX (172628)

      I've horrible luck with NYC taxi drivers knowing the city.

      By cross street, address, or landmark.

      I don't fucking know how to get to the city courthouse, because I don't fucking live here, ugh. It's gotten a lot better in the last 5 years with smart phones, but a lot of them did not know the city, or have GPS up until then.

    • Because that said random car will actually stop for you during peak hours, and all the taxi-holding medallions won't because they're overwhelmed. Have you ever tried hoping into a taxi that won't even slow down to pick you up?

      • Well...during peak hours, Uber X will go into surge pricing and cost far more than a taxi anyways.

        Usually when there is surge pricing, I just use Uber to hail a normal taxi (in cities where this is possible). With a normal taxi, you pay a small fee to Uber, but otherwise the rate is straight-meter. Of course, that still won't help if literally every taxi is full, but it gets you better odds than simply standing on a single street corner and waving your hand.

  • by Anonymous Coward

    1. Deregulation;
    2. Big newcomer with huge financial backing undercuts established companies;
    3. Everyone flocks to newcomer;
    4. Established companies reduce routes or go bankrupt;
    5. Newcomer uses new position to engage in gradual programme of regulatory capture;
    6. Newcomer boosts prices way above previous companies;
    7. Newcomer shuts down less profitable routes, because see 5.

    Bus services here used to be comprehensive and cheap. Now all the short routes are dominated by one company.

    • Yeah and do not forget. They get the regulatory capture because they are 'too big to fail' and there are 'no alternatives'.

  • and if an accident occurs will uber get to use fine to get out having to pay up like a real taxi?

  • by jratcliffe (208809) on Monday July 07, 2014 @04:12PM (#47402431)

    UberX in NYC is somewhat different from UberX in most markets. In NYC, UberX uses licensed livery cars and drivers (who have livery licenses, commercial insurance, etc), the same as Uber Black, etc., and the standard car service companies. The only difference between UberX and Uber Black in NYC is that UberX will have less nice cars (typically Camrys vs. Town Cars).

    This is very different from UberX in SF, LA, etc., where it's pretty much "got a car? got a license? congrats, you're an UberX driver!"

  • Well Sure (Score:1, Insightful)

    by CanHasDIY (1672858)

    It's easy to undercut the competition when they adhere to regulations and you don't.

    • it's easy to undercut the competition when the competition is a government-protected unionized racket that uses political arm-twisting and actual arm-twisting to keep their monopoly in place. The "regulations" you speak of are only in place to keep better businesses from entering the market. Sucks to be them, good for consumers. I am not shedding tears.
      • by easyTree (1042254)

        Uber announced in a blog post on Monday it would cut the prices of its UberX service in New York City by 20% — but it's only for a limited time

        A limited time X; where X is infinitesimally greater than the time it takes to establish a critical mass which will lead to a monopoly? Just wondering :D

  • One thing that you get from taxis that you don't get from Uber (or clones) is an assurance that the rates will be metered fairly.

    I use Uber Black whenever its available because I trust the company and I enjoy the product. That doesn't mean that I don't acknowledge the need for some regulation in the taxi market. We tried going all gypsy before and it didn't work very well - hell, DC was annoying until just a few years ago with random pricing.

    Uber could choose to work with the cities and go in offering ful

    • One thing that you get from taxis that you don't get from Uber (or clones) is an assurance that the rates will be metered fairly.

      Uber could choose to work with the cities and go in offering full (anonymous, 1 week delayed) logs of all trips with pricing information. Any city inspector could take a trip and then compare his calculations to his receipt and, when it appeared publicly, the log records.

      You say you've taken Uber before, but you make this uninformed statement? Every time you complete an Uber ride (or Lyft ride), you get an email saying the exact distance and exact duration of the ride, then the costs associated with each and the sum to the final bottom line. It also includes a map of the area you traveled, with a bright line showing the path of the trip. So this takes care of concern for your "metered fairly" issue. Sounds like you're an astroturfer for the taxi cartel.

  • by Anonymous Coward

    When will we have Uber for airplanes? There are many private pilots who would love to make some money by flying paying passengers yet FAA requires some pesky commercial pilot license. How can we "Uber" that license requirement?
    There are so many rules that I would like to "Uber"...

    • The FAA has some very clear and very strict laws about that. A private pilot can not charge for transporting passengers. The on;y exception to this is that a passenger can pay for, at most, their share of the cost of expenses such as gas. That means if a private pilot transports two other people, each can pay for up to 1/3 of the costs for gas and such but the pilot must pay for his own share. And those costs absolutely can not include things like annual or hourly maintenance costs. If you luck out and find
  • by smoothnorman (1670542) on Monday July 07, 2014 @04:52PM (#47402737)
    Where's the posting which shows that Uber, which is bank-rolled against the small time (typically immigrant) taxi owner, is now coupled with ALEC ("the notoriously evil American Legislative Exchange Council" aka Koch brothers)?: http://slog.thestranger.com/sl... [thestranger.com]
    • Never priced a medallion I guess. They don't own the taxis.

      • They do in Seattle and SF and Chicago at least (often, but not always Sikhs). they started as drivers and now own a medallion. often they are paying off loans for it. and along comes Bezos backed Uber...

        the cities demanded that they buy them to do business. now some of these cities are negotiating with Uber. how does your trusting immigrant business owner feel now?

  • So how will this affect Cash Cab? Will Ben Bailey now have to put a pink mustache on the front of his vehicle? Will people have to use an iOS app to get a ride? Will people be required to fist-bump Ben Bailey as they enter the car?

  • If your job is going to the way of the dodo, then get off your ass and learn something that isn't. I have no sympathy for people who spend their lives in bottom-of-the-barrel jobs only to be surprised that they're being replaced with a better system.

  • "Cheaper than a New York taxi"... umm, "What is a bar of gold, Alex?"

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