Anyone who’s ever found themselves facing Uber’s surge rates has probably grumbled something along the lines of, “Well, at least cabs don’t charge more when it’s busy.” Which is true in most places with taxis licensed by the city where they operate. But what about other times when surge isn’t in effect — which service provides a cheaper ride?
Researchers at the University of Cambridge in the United Kingdom took on this question using data mined from New York City’s Yellow Taxi fares, which are set by the city, reports the MIT Technology Review. This, compared to Uber fares, which are determined by Uber depending on the service you’re using, the time the trip takes and sometimes by the distance traveled.
The question is, despite the ease and popularity of using Uber, is it cheaper than conventional cabs? To find out, researcher Cecilia Mascolo at the University of Cambridge and a few others compared Uber’s prices with Yellow Taxi fares in NYC [PDF].
Using data obtained through a freedom of information request associated with NYC Yellow Taxi trips in 2013 and compared that to what Uber said it would charge for the same journeys.
The cab data covers hundreds of millions of trips, and includes the location of every pickup and drop off and the fare paid for each journey. Uber then suggested a maximum and minimum fare for those same trips using its cheapest service, UberX, and researchers took an average to come up with a figure to compare with cab fares.
So which is cheaper — at least in NYC — a cab or an Uber? It depends on how far you’re going, researchers say.
“Uber appears more expensive for prices below 35 dollars and begins to become cheaper only after that threshold,” say Mascolo and her team.
This works out nicely for Uber, the researchers explain, because humans usually take a lot more short trips and relatively fewer long trips.
“This observation therefore suggests that Uber’s economical model exploits this trend of human mobility in order to maximize revenue,” the researchers say.
While the Yellow Taxi data comes from 2013 and the Uber data is from 2014, taxi prices are set by NYC and haven’t changed since 2012, so the comparison should be a fairly good one.
However, researchers didn’t take Uber’s surge pricing model into effect. They argue that it’s still a useful comparison, despite that.
“We argue that the process of comparing two different companies that provide the same service in the same geographic area is of value to commuters,” they say.
The team developed an app called OpenStreetCab that is designed to help users compare Uber prices with cab prices, a tool that only works in New York so far.
Data Mining Reveals When a Yellow Taxi Is Cheaper Than Uber
by Mary Beth Quirk via Consumerist
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