How Uber Works: Pros and Cons

The ride-sharing service is used worldwide

The Uber app can be downloaded quickly as accounts are established.
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Since its launch in 2012, Uber has become the most recognized alternative to traditional taxi cabs. As of September 2018, Uber is available in 633 cities around the world. Whether you're traveling to Seattle, Dubai, Tokyo, London, Paris, Montreal, or Chicago, you can expect Uber rides to be available in those cities and other major metro centers. Uber's success has spawned other, similar services such as Lyft, but Uber remains the most popular. In fact, Uber is so common that expressions like "getting an Uber" and "Ubering" in various languages have become widely understood.

Uber is not a taxi service, per se. Drivers cannot pick up riders off the street who are hailing cabs. Instead, Uber is a car-for-hire service that relies on smartphone tech to dispatch drivers and manage fees. Also unlike taxi services, Uber drivers do not possess special licenses; rather, they use their personal vehicles to offer discounted-fare rides. 

Uber's smartphone app takes care of the entire ride-hailing and payment process. You use your credit or debit card to pay right in the app, so you don't have to have cash available — although you can opt to pay in cash in some cities.

You must be 18 years or older to have an Uber account and use the service. In the United States, drivers must be at least 21 years old, have at least one year of licensed driving experience, and drive an acceptable four-door vehicle.

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How Uber Works

Young man holds a smart device while using Uber app
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Uber is intended to be easier than using a taxi. 

The Uber Process:

  1. Install the app on your smartphone and create an online Uber account. You'll provide information about the credit card you plan to use to pay for rides, so you never need to bring or handle any cash.
  2. When you need a ride, use the app to tell Uber your pickup location.
  3. Uber will text you to confirm how many minutes you will wait. Rides are commonly three to 10 minutes away in major centers.
  4. Uber will text you when the ride has arrived. The Uber app will show you the details of the driver, such as name, photo, and type of car so you know what to look for.
  5. Take the ride, optionally sharing with any other Uber users who can split the fare electronically with you.
  6. The app handles payment. You just step out of the car at the end and thank your driver. Tips are optional. You can give the driver a cash tip at this point, but most riders add the tip later, through the app, at riders.uber.com, or from the emailed trip receipt. This is meant to keep the ride cash-free and, therefore, easier and safer than carrying cash.
  7. After your ride, you'll rate the driver on a scale of 1 to 5 (politeness, safety, cleanliness). Similarly, the driver rates you from 1 to 5 (politeness).

The entire trip is tracked through the Uber app for accountability and ease.

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Why People Love Uber

Uber is much loved by its millions of users

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Uber's appeal revolves around the trifecta of price, quality standards, and convenience. 

Price

Taxi cab drivers hate Uber because Uber undercuts their fees by up to 50 percent — but this, of course, is a main reason riders love using Uber. Plus, Uber drivers don't require tips and can't pressure you for them; as mentioned, you can add them later in the app. Taxi drivers, on the other hand, typically expect at least 15 percent tips at the time of payment inside the taxi.

Quality

Uber cars tend to be cleaner, newer, and better-smelling than many taxis. The accountability built into the Uber app motivates drivers to keep their cars in good shape.

Convenience

The payment process easy and stress-free. Likewise, the app frees you from the often frustrating process of hailing a cab. The ability to handle all these details right from your phone saves time and aggravation (and keeps company and driver overhead low). 

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Lower Fares

Taxi Driver Suicides On The Rise In NYC As App-Based Rides Stifle Profits
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While rates vary by city and time of day, substantial public data shows that using UberX can cost 25 percent to 50 percent less than taking a local taxi cab.  

Bear in mind, however, that Uber does impose surge pricing for peak events like major sporting matches and New Year's Eve when ride fees can climb significantly for a few hours. As a rule, though, Uber rides are cheaper than taxi cabs.

Sources of fare comparison data:

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Fast Service

Uber is quick

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Because Uber is attractive for drivers to join, the number of available drivers usually results in very fast response times. While this certainly does vary, the typical Uber rider gets a pickup within three to 10 minutes of hailing, while taxis can take 30 to 45 minutes after being called.

Because Uber drivers are rated by every passenger every day, there is the incentive to be both prompt and safe.

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Service Tiers

Uber Black

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Uber offers a range of service tiers, spanning from single riders and groups up to executive limo services:

  1. UberX is the cheapest and most commonly used form of Uber. Vehicles are ordinary, four-door, late models that fit up to four riders. Fares run up to half those of taxis in major cities.
  2. UberPOOL, offered in some cities, allows you to share your ride with another person and split the cost.
  3. UberXL can accommodate six passengers, using an SUV or minivan; it's more expensive than UberX.
  4. UberSelect offers four-rider luxury sedans with leather interiors in brands such as Audi, Mercedes, and BMW. Expect to pay a premium price.
  5. UberBLACK is a luxury limousine service, with appropriate pricing.
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Driver Ratings After Every Ride

Uber drivers: yes, you rate them with every trip

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Part of Uber's appeal is that drivers are under tremendous pressure to deliver pleasant, safe, prompt, and clean experiences for passengers. Every passenger rates every driver on every trip, and drivers are required to maintain an average customer rating of 4.6 out of 5.0. (Minimums vary by city.) Uber deactivates drivers who fall below this standard.

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Passenger Ratings, Too

Washington, D.C., scenics
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Uber does not disclose this to passengers directly, but every driver gets to see your rating deciding whether to pick you up. And yes, every driver rates you right after you leave the Uber vehicle at the dropoff point.

The intent of rating passengers is to protect future drivers from having to deal with rude, violent, aggressive, and drunk/impaired passengers. If your rating is too low, Uber can bar you from using the service temporarily or permanently.

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Checking Your Uber Rating

Uber Car
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To encourage kinder, gentler Uber rider behavior (stop slamming doors!), the app displays rider ratings right underneath names in the Uber app's menu.

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Becoming an Uber Driver

It's relatively easy and cheap to become an Uber driver

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In large cities, taxi cab drivers pay $500 to $1200 per month to their parent companies and to their municipalities. This cost includes dispatch and administration services and any additional fees that the taxi company chooses to levy on its drivers.

Uber does not charge any of these monthly fees to its drivers, making Uber very attractive for amateur drivers and a source of consternation for taxi drivers.

Uber requires that you:

  • Are at least 21 years old
  • Have at least one year of licensed driving experience (three if you are less than 23 years old)
  • Possess a clean driving record
  • Have no criminal record
  • Drive an insured car that is less than 15 years old

Your car must:

  • Have a clean title (not salvaged, reconstructed, or rebuilt) 
  • Not be a rental, unless it's from an approved Uber lender
  • Not have damage, missing pieces, commercial branding, or taxi signage

Uber will confirm all these details with the appropriate authorities. Uber will also do a background check, looking for serious infractions such as excessive speeding, driving while intoxicated, sex crimes, and other criminal offenses. 

In short, if you're an honest person, safe driver, and reliable worker with a newer four-door car, you can be an Uber driver within two weeks or so.

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Uber Competitors

Lyft: arguably the biggest competitor to Uber

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 Competitors to Uber include: