Is an Uber Really Cheaper Than a Taxi?

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Rideshare services like Uber and Lyft have infiltrated nearly every major city in recent years, effectively giving taxis a run for their money. While it may be easier to call an Uber on your smartphone with (literally) just the touch of a button, is it really cheaper than hailing a taxi? Or are you paying a premium for convenience?

We set out to determine just that—just what is the cheaper option, Uber or a taxi?

What Are the Base Rates for Each?

We’ll look at a few different cities for comparison's sake. In New York City, a taxi charges an initial fee of $2.50, $0.50 cents per 1/5 mile, and a waiting charge of $0.50 cents per 60 seconds, while UberX (which is what we’ll use throughout this article) charges a base fare of $2.55, a per minute charge of $0.35, and a per mile charge of $1.75. Seems similar enough.

In Philadelphia, taxis charge $2.70 for the first 1/10 mile, $0.25 each additional fraction of a mile, and $0.25 for every 37.6 seconds of waiting. UberX, on the other hand, charges a base fare of $1.25, a per minute fee of $0.18, and a per mile fee of $1.15. The price discrepancy is a bit more pronounced here.

In Washington D.C., taxis charge a base fare of $3, $2.16 per mile, and about $2 per every five minutes of wait time. UberX in Washington, D.C. charges a base fare of $1.15, $0.17 per minute, and $1.08 per mile.

In Los Angeles, a taxi costs $2.85 for the first 1/9 of a mile, $0.30 for each additional 1/9 mile, and $0.30 for each 37 second wait time. UberX, however, charges no base fare, $0.15 per minute, and $0.96 per mile.

The cost your trip will depend on many factors, including distance traveled, traffic, and time of day.

And while some of the rates are similar in structure and amount, there is one major difference: Taxis charge per mile when moving, and per minute while idling, while Uber charges per mile and per minute, regardless of whether they are moving or idling, with a few exceptions.

If you’re considering which service to take to the airport, the cheaper option is almost always Uber. In fact, there are only three major airports (New York’s LaGuardia Airport, New York’s JFK, and Boston’s Logan Airport) where it’s cheaper to take a taxi instead of an Uber.

Consider the Variables

When comparing the cost of Uber versus taxis, there are several variables to consider. For one, many taxi riders tip their drivers around 20 percent. And while Uber does offer a tipping option, it’s relatively new and not as widely used. Uber also charges a cancellation fee which varies by city, as well as a minimum fare amount.

Uber’s surge pricing is another major variable that can affect cost, sometimes in a big way. (Check out this story of a 20-minute Uber ride costing a staggering $14,000, due to surge pricing.) Surge pricing essential means that Uber’s cost varies depending on demand. So, expect to pay a much higher fare on nights where cabs are in high demand, such as New Year’s Eve.

Here’s how it works: if you open the Uber app and you see a 1.8 surge price, that $10 trip would cost you more like $18. ​Avoid surge pricing by waiting a few minutes or walking a few blocks (if you’re in a safe area) in another direction.

The Verdict

Some experts say Uber is cheaper for longer trips moving at a faster speed, while taxis are a better choice for trips in congested cities, like New York City.

Geographic location also matters. According to this RideGuru analysis, Uber is cheaper than a taxi in cities like San Francisco, Los Angeles, and Detroit, while taxis are cheaper in New York City.

It’s a near-draw in cities like Washington, D.C. and Nashville.

At the end of the day, which is cheaper, Uber or a taxi? The answer, it seems, is it depends. Factors such as geographic location, time of day, demand for rides, and other external factors such as traffic and speed can all tip the scale one way or another. However, a recent study by GoBankingRates found that in 16 of 20 major U.S. cities, Uber was the more economical choice.

Another way to determine your best option? Download the OpenStreetCab app. You simply input your location and destination and it will crunch the numbers for you then tell you the cheaper option, Uber or taxi. However, it’s only available in select cities. Technology, am I right?