Comparison of Uber and taxi fares reveals the point where it’s cheaper to get a cab
UBER’S always cheaper right? Not necessarily and new research has revealed when you might want to get a taxi to save some cash.
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IT’S the Uber assumption — that if you jump into an Uber rather than a taxi you are more than likely to have a cheaper journey.
But new research has suggested that while UberX is indeed cheaper than cabs in normal conditions, it doesn’t take long before traditional taxis start to look like the better value option.
At this time of year, with Christmas parties in abundance, opting for an UberX is even more popular.
Graham Cooke, insights manager at comparison website finder.com.au, told news.com.au too many people simply assumed Uber was almost always cheaper and never checked the surge pricing. But there was a “sweet spot” where the average prices were identical.
“What we were trying to find out was, at what point is jumping in a taxi actually cheaper than an Uber. It can be difficult to know what that point is.”
Uber told news.com.au price was just one factor in booking a ride along with safety, convenience and reliability.
When Uber users book a ride through the app they have to agree to the quoted price before a car is ordered.
At busy times, when there are more customers vying for cars, that fare can “surge” with the app showing how many times higher the new price is compared to a standard fare.
A surge price of 2.00x means the normal price has been doubled.
Uber’s surge pricing has come as a rude shock to some including Sydney woman Skye Shanahan. She had a very unhappy New Year 2016 when she was stung $720 for a ride from the harbour to the city’s western suburbs that would normally cost $100.
But the bar can be a lot lower than the massive surge hikes that can occur on national holidays.
“In Sydney a surge rate of above 1.30 times the normal Uber fare, on a normal weekday daytime, means it’s actually cheaper to get a taxi,” said Mr Cooke.
Adelaide was the city where the difference between the Uber and cab fare was the least during the day. In the South Australian capital a spike in Uber prices by a mere 1.29 times the normal fare, or a 29 per cent rise, was enough to make cabs competitive.
“Brisbane had the highest rate chiefly because in Queensland taxis still charge a 10 per cent fee for paying by card while Uber don’t charge card fees,” he said.
In Brisbane a surge of 1.74 times normal prices would have to be reached before cabs were competitive.
Finder.com.au picked five routes in each of Sydney, Melbourne, Brisbane, Adelaide and Perth. The average standard fares were compared between cabs and Uber. For taxis, credit card surcharges and the base fare were added in.
In Melbourne, cabs cost the same at 1.39 times the standard Uber fare while in Perth it was 1.47 times.
Things changed after dark.
“At night time, taxis became slightly more expensive and because of that the Uber surge point goes up so you can give Uber more leeway,” said Mr Cooke.
It’s in South Australia that cabs are once again most competitive against Uber. At night in Adelaide, a surge of 1.48x on Uber will equal taxi fares. In Sydney the surge sweet spot is 1.54x, in Perth 1.58x and in Brisbane 1.65x.
But it’s in Melbourne where Uber really has the edge during the evening. Uber fares would have to go up by 1.75x — or getting on for double — before cabs had a look in.
A report by Deloitte from early 2016 found UberX, rides booked through Uber that are not cabs, were 20 per cent cheaper than taxis.
Mr Cooke said there were two things Uber users should keep in mind.
“First of all, keep an eye on the surge ratio but also make sure you plan ahead because you don’t want to get an Uber at 1am on New Year’s Eve and get a shock.
“If it’s going to be expensive, travel with a group so the per person fare will be less,” he said.
Mr Cooke also recommended downloading similar apps to Uber and to compare fares.
An Uber spokesman told news.com.au that their app had been improved with “upfront pricing” that made the total fare clearer.
“Over 2.4 million Australians are choosing Uber because it’s a safe, convenient, reliable and affordable way to get from A to B.”
The average arrival time for an Uber 24/7 was five minutes the company said.
Mr Cooke agreed that availability of cabs was also a factor. “I had my work’s Christmas party recently and going home there were no cabs anywhere.”
In that case Uber might be the only option regardless of any surge.
Originally published as Comparison of Uber and taxi fares reveals the point where it’s cheaper to get a cab
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