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Transportation Businesses The Almighty Buck Technology

Data Research Reveals When Taking a Yellow Cab Is Cheaper Than an Uber 155

An anonymous reader writes A team of data scientists have come up with a system to identify times when regular yellow taxis are cheaper alternatives to an Uber [in New York]. Researchers from the University of Cambridge and the University of Nanmur in Belgium have compared a broad dataset of both yellow taxi and Uber fares in New York and have discovered that for a trip costing less than $35 Uber is often the most expensive option. The data scientists were able to reach this conclusion by comparing trip and fare data for each yellow taxi ride taken in 2013 and entering it into Uber's fare query system. Prices were taken from Uber's lowest-cost service Uber X and the NYC Taxi and Limousine Commission.
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Data Research Reveals When Taking a Yellow Cab Is Cheaper Than an Uber

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  • by Anonymous Coward

    They do it because of the smell.

  • by JBMcB ( 73720 ) on Tuesday March 17, 2015 @01:48PM (#49277063)

    I always thought that Uber was more expensive, the idea being you could usually get an Uber car more easily than hailing a cab.

    • Uber X is cheaper than taxis in most markets. Uber Black is more expensive (but you are in a towncar or luxury SUV).

      This study seems stupid. They say they used uber's fare estimates? Why the hell would they do that? If they know time and distance (which the NYC taxi dataset provides), they can calculate exact fares. Uber X is priced just like a taxi...flag pull fee for getting in the car plus X dollars per mile and X dollers per minute of time.

      NYC is a different market (and for a while, their Uber

      • Upon a bit further analysis, it looks like there is one variable that makes it stop being an easy algebra problem....NYC cabs charge time fares only when the car is not moving. Uber X charges time for the entire ride. So if you had a 10 minute 5 mile car ride, there would be a difference between one where you crawled along at 30 mph and one where you got on the highway and went 60 but spent 5 minutes waiting at lights getting on/off.

        Uber also has an $8 minimum fare in NYC...so any trips less than a coup

  • Cab fares are regulated and based on distance traveled; at least for most trips. Uber drivers are unlikely to want to drive to pick somebody up for a $5 fare while a cab that drive by will pickup the passenger since they are there anyway. It's an opportunistic transaction for the cabby, that unless they have a more valuable fare they think they will get before dropping off the short trip, it makes sense for them to take the trip even if it is only a $5 fare. In auditor, unlike an Uber driver the cab driver
    • Except that Uber drivers often DON'T know where the fare is going. They only know that if you enter it before pickup, and there's zero requirement that you do so.

      • Fair enough. However, in such cases the Uber driver has the ability not to be available and thus Uber must raises prices to the point drivers are willing to pickup fares; so drivers self select out of the short trips or they cost a lot more.
        • Huh? How can Uber drivers self-select out of short trips if they don't know where the trip is going? Also, the system doesn't work that was, as I understand it. Drivers hit the on duty button on the app, then they're available, until they hit off duty. If they get an assignment, they can in theory turn it down, but do that more than a few times, and you'll be dropped off the system.

          • Huh? How can Uber drivers self-select out of short trips if they don't know where the trip is going? Also, the system doesn't work that was, as I understand it. Drivers hit the on duty button on the app, then they're available, until they hit off duty. If they get an assignment, they can in theory turn it down, but do that more than a few times, and you'll be dropped off the system.

            It's not so much short trips as low paying trips, which normally would be a short trip. If Uber charged near what a cab would for trips they probably would not get many drivers as they pay would be relatively low and thus drivers would simply not make themselves available. I think it has much to do with the business model. Uber bills itself, to drivers, as a way to make money with their car. The drivers are already paying for it and use it for more than making money and thus need a higher level of payment t

            • Again, in NYC, all Uber cars (including UberX) are commercial vehicles with drivers who have TLC licenses.

              • Again, in NYC, all Uber cars (including UberX) are commercial vehicles with drivers who have TLC licenses.

                Which is irrelevent to the underlying economic decision making process. If the same economics drove it you'd see prices converge to cab prices.

                • If the same economics drove it you'd see prices converge to cab prices.

                  Except that the operating costs for taxi drivers are heavily driven by the cost of the medallion (at least half of the per shift lease fee for an NYC taxi goes to generate a return to the medallion holder, not cover the purchase and maintenance cost of the vehicle). Uber takes that out of the equation, so that it's feasible to see drivers making more money working the same # of hours.

                  • If the same economics drove it you'd see prices converge to cab prices.

                    Except that the operating costs for taxi drivers are heavily driven by the cost of the medallion (at least half of the per shift lease fee for an NYC taxi goes to generate a return to the medallion holder, not cover the purchase and maintenance cost of the vehicle). Uber takes that out of the equation, so that it's feasible to see drivers making more money working the same # of hours.

                    Exactly, which is why I said the economics of a cab are different than Uber's. A cab has a high fixed cost and thus the driver needs to cover that cost, even if it means taking 20 short trips instead of fewer longer ones. Short trips may even be better if the driver could be assured of minimal time between them. The driver has a number they need to hit on their shift to cover costs and make money, so they have an incentive to stay as busy as possible. The Uber drive doesn't have such high fixed costs, so th

                    • I think the real concern with cab companies is the threat Uber is to the value of a medallion. If you've paid hundreds of thousands of dollars for a medallion, and are counting on it going up in value over time, anything that threatens that value must be crushed. If Uber were able to significantly dent cab demand in NYC and cab drivers decided to buy their own car to drive for Uber and not lease a cab, medallions would decline in value and people who have invested in them would lose serious money.

                      100% agree, and it looks like this is already happening.

                      http://www.nytimes.com/2015/01... [nytimes.com]

                    • I think the real concern with cab companies is the threat Uber is to the value of a medallion.

                      100% agree, and it looks like this is already happening.

                      http://www.nytimes.com/2015/01... [nytimes.com]

                      It'll be interesting to see how that shakes out. I used to be medallion was a way to make a lot of money. What other asset worth hundreds of thousands could you sell to someone with virtually no credit, let alone the assets to cover a note like that? The beauty of it was the medallion was easily repossessed by prying it off the hood and was growing in value as well; and easy to resell. The borrower, OTOH, was likely to pay for the medallion first since they stood to lose everything if it was repossessed. Y

                    • Yeah, the big medallion holders (who hold most of the medallions) are definitely hurting.

                      This guy seems to be in default (apparently, he can't get drivers for his cabs, so they're not generating revenue - next logical step is to start discounting the lease):

                      http://nypost.com/2015/03/16/t... [nypost.com]

                      Also, check out the chart for Medallion Financial (ticker TAXI). Ugly.

        • What?

          The driver has no way of knowing how long of a trip you are taking until you get in their car. At that point they can't kick you out (well, they *can*, but if they make a habit of them, uber will fire them).

          Besides, short fares aren't bad unless you have to drive a long way to pick them up. Like a yellow cab, there is a flag pull fee just for sitting down in the cab. A half mile ride is worth like 75% of a mile ride. Payment is instant in the app, so its not like you lose time while they fish f

          • What?

            The driver has no way of knowing how long of a trip you are taking until you get in their car. At that point they can't kick you out (well, they *can*, but if they make a habit of them, uber will fire them).

            Besides, short fares aren't bad unless you have to drive a long way to pick them up. Like a yellow cab, there is a flag pull fee just for sitting down in the cab. A half mile ride is worth like 75% of a mile ride. Payment is instant in the app, so its not like you lose time while they fish for money, give change, etc.

            While a driver may not have knowledge of a particular trip they will, over time, develop a picture of what trips are likely to be and use that to base a decision on wether to be available for assignment. If they do not think they will make enough on trips they simply will not make themselves available; thus Uber, in order to have sufficient drivers, charges more in order to make taking trips, which may be short trips, attractive enough for drivers.If Uber paid drivers closer to what taxi drivers make on a t

  • Missing the point (Score:5, Insightful)

    by Just Some Guy ( 3352 ) <kirk+slashdot@strauser.com> on Tuesday March 17, 2015 @01:53PM (#49277105) Homepage Journal
    I don't take Uber (or more often: Lyft) because it's cheaper. I use these services because 1) the car actually shows up, 2) when it's supposed to, and 3) I know ahead of time how much it will cost. Even if it's a couple of bucks more, that's well worth the vastly better customer service.
    • I take it because I know how to pay for it. yellow cabs have weird habits of telling you after you get where you are going that they only take cash. sure, i can say, "well all if have is $5 cash so here you go." but honestly, planing for a confrontation at the end of every ride just isn't enjoyable.
      • Why is that? Is it because they want to earn money off the record and credit card transactions are logged?
        • by alen ( 225700 )

          yes

      • This used to be a serious problem in NYC, but I haven't had a driver try the "credit card machine is broken" scam on me in at least three or four years. They may try it on tourists, but NYCers have known for years that the law is clear - unless the driver informs you upfront that the credit card machine is broken (before he turns on the meter), then, if he refuses to take a credit card, the ride is free.

      • So is that so much of a problem to carry cash for a cab? or any other low value transaction?
        • Yes, when almost everything else from snack stands to food trucks takes plastic and you get into the habit of never needing cash.
    • Re: (Score:2, Interesting)

      by Anonymous Coward

      Exactly. I used to live in a "popular" neighborhood of Seattle (Capitol Hill) with a lot of bars and clubs. Every time I called a yellow cab (in the evening), they would never show up because they'd pick up someone along the way and disappear without notifying me. Every single time. The only way I could get a cab was to walk to a major street and try to hail one. Hugely inconvenient with the rain and steep hillside - this is for going out in the evening, so there's a fancy hairdo and high heels involved, an

      • Or maybe they were somewhat averse to picking up a transvestite? (Assuming you are male because you are on /.)

    • Re: (Score:2, Insightful)

      by SvnLyrBrto ( 62138 )

      Also, I've never gotten into an Uber and smelt the stink of smoke, vomit, or pee. No Uber driver has whined or refused when I asked to be taken out to the avenues, bayshore, or the outer mission. And I've always been able to get an Uber in those neighborhoods with no more than about a 15-minute wait.

      None of that is true of taxis.

    • > 2) when it's supposed to, and 3) I know ahead of time how much it will cost.

      Until it doesn't because the drivers are gaming the surge pricing algorithm.

  • The last time I rode a cab was decades ago and it was over $25 for maybe 8 miles. Being as gas costs 2.5-4 times as much now as it did back then I figured the fares would have scaled accordingly.

    Or perhaps I'm just willing to walk further than some other people...
  • Taken more than a few Ubers and cabs in Chicago. Uber has typically been 2/3 to 3/4 of the cost of a yellow cab trip. The only time an Uber has been consistently higher has been during surge pricing. Trips from downtown Chicago to ORD or MDW are almost always cheaper with Uber, usually 10-15 bucks. I try to avoid either during rush hour, as taking buses/trains or walking is usually faster.

    I've never taken an Uber in NYC, so their mileage obviously varies. I have taken them in Indianapolis, Nashville,
    • Uber X in NYC is expensive compared to Chicago. Almost as expensive as a yellow cab and has an $8 minimum so if you are only going a mile or 2, it isn't necessarily cheaper (and uber charges for time the car is moving in addition to distance...yellow cabs only charge time when the cab is stopped). I still don't understand why these researchers used estimates since they could have calculated exact fares for exact rides...their $35 figure seems like bullshit. If there is no surge, it will almost always be
    • And the great thing is if the Uber driver gets in an accident you know with certainty that there is little to no insurance to cover your injuries.

      $20k won't cover one ER visit where they have to do emergency surgery. Hell spend a day in the ICU in some metro areas and you could easily top that even without surgery. I had a relative spend 3 days in an ICU in San Fran and bill was $92k.

      Uber keeps pricing down by cutting corners on maintenance, insurance and driver wages. That's a wicked combination IMO. One o

  • by jratcliffe ( 208809 ) on Tuesday March 17, 2015 @01:55PM (#49277127)

    Just so folks know, UberX in NYC is unlike UberX in any other market, in that the cars are drivers are all licensed livery cars and drivers with TLC (Taxi and Limo Commission) commercial licenses and insurance. This is unlike the rest of the US, where UberX drivers and vehicles don't need commercial licenses and plates.

    Only real difference between UberX and Uber Black in NYC is the quality of the car (usually Camrys or similar with UberX, and Town Cars or big SUVs with Uber Black).

    • by Holi ( 250190 )
      Wait, just because they don't have them doesn't mean they don't need them. Here in RI they are required to have them but Uber says no they are "ride sharing".
      • OK, to clarify, then, in NYC UberX drivers _do_ have TLC licenses and TLC-plated cars. In the rest of the country, they don't (whether or not they're supposed to).

      • Hey, I thought I was the only Slashdot reader in RI.

        • by Holi ( 250190 )
          Oh no, not by a long shot. You should swing by the Hot Club, I know few on here that stop by there.
          • Oh no, not by a long shot. You should swing by the Hot Club, I know few on here that stop by there.

            I dunno... Providence is such a long drive. It would take me like 45 minutes...

            (Just proving my RI bona fides :)

  • by Anonymous Coward

    I was new to the Seattle area and a college student, asked to be taken on a mainstream road in Bellevue (148th Street iirc), the cabby claimed not to be able to find it. Mind you this was 17 years ago and was 10pm, I was desperate to meet my roomate while he was still up and get into my new apartment. What should have been a $35 taxi ride cost $105. Gas was $1.16 in the area and I thought it was high compared to my area.

    I already knew he ripped me off bigtime and couldn't happen with smartphones today ne

    • Pretty ballsy for a cab driver to claim not to know how to get to 148th Street.

      "Do you know how to get to 147th street, asshole? WELL IT'S ONE BLOCK FROM THAT!"

      • Pretty ballsy for a cab driver to claim not to know how to get to 148th Street.

        Ballsy or just stupid. Despite all the tests they are supposed to have taken on area streets, Seattle cab drivers seem outside their depth when going to anywhere outside of the core downtown and the airport. Several times I've got tired of them consulting road guides and talking to the dispatcher and just start giving directions: "Straight through the light, get on I-5, take the Olive St exit - this one right here!, left at the next light, take a right, stop next to that tree". I've never had similar situat

  • Tipping? (Score:2, Insightful)

    by TFoo ( 678732 )
    It doesn't look like they took into account tipping for cab fares. A 15% addition to the Taxi fares would make Uber the clear winner in all cases, I think.
  • I have been taking Lyft "Line" around and it's sweet.. They take you just about anywhere for $5. Yes, you have to stop and pick someone else up or drop them off usually but it's so damned cheap! This is one of those too good to be true things that will only last till the end of the tech bubble. Reminds me of getting Kozmo.com to deliver a snickers bar to your door during the last bubble.

  • I've taken at least 3 dozen Uber/Sidecar/Lyft rides , most expensive one was 28 bucks , i usually take short trips and it's not only cheaper, it's a LOT cheaper, if it wasn't for those options I wouldn't catch a cab because they are prohibitively expensive

  • I use Uber for the superior quality of service. If you call Uber, you get picked up when they say you will. If you call a cab, you can wait an hour before you even KNOW if they're going to show up at all. Add to that, the fact that the Uber cars are clean and the drivers are polite, and I'm sold.

    -jcr

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