Even though it's not publicly traded, there's perhaps no company that elicits a bifurcated response quite like ride-hailing service Uber. For its defenders, the company is both a jobs creator and a triumph of the entrepreneurial spirit, and is perhaps the poster child of the evolving "on-demand economy" that has been a bright spot during the U.S recovery.
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On the other hand, there are also detractors on multiple fronts. Recently, Hillary Clinton praised the "gig economy" for "unleashing innovation," but worried about workplace protections amid an economy that has seen productivity gains and operational profit benefit shareholders more than employees. And from the "politics makes for odd bedfellows," maxim, the Philadelphia Parking Authority -- a majority Republican board -- and liberal New York City Mayor Bill de Blasio recently found themselves on the side of attempting to limit (or stop) Uber's growth.
Love it or hate it more than a Parisian taxi driver, it seems Uber is here to stay. And that's because it's generally less expensive to use Uber than cabs. But that doesn't mean it's always cheap to use Uber, which has a tagline on its site aimed at drivers of "Your car. Your schedule. Your opportunity to earn."
Uber's billing structure and my pesky assumptionsUnfortunately, finding the most expensive cities for Uber customers is easier said than done. For those unfamiliar with Uber, its bills are a mixture of fixed and variable costs -- the latter is further complicated by standard and surge pricing, which raises prices during times of high demand. For the fixed costs, the company charges a base fare -- which can be thought of as the cost of admission -- and a service fee called the Safe Rides Fee. The variable costs are a mix of both per-minute costs and per-mile costs. Of course, miles traveled and time to do so is inherently varied, so your mileage may vary.
In order to render apt comparisons, I created a model to calculate costs for three scenarios for 33 major U.S. cities using standard pricing gathered by Uberestimate, which is not affiliated with Uber, but says it gets fare estimates direct from it: short, medium, and long. Assumptions for the short trip are 5 miles and 10 minutes; medium: 10 miles and 20 minutes; and long: 20 miles and 40 minutes. Here are my results for the top five cities for short, medium, and long rides:
Data source: Uberestimate
Five cities stand outInterestingly enough, the same cities finished in the top five of all three scenarios. And that makes sense, as these cities are the top five in per-mile charges and per-minute charges. When it comes to fixed costs, however, there are some contradictions: Portland's Base Fare cost of $1.50 is shockingly less than the 33-area average and New York City has no service fee (or Safe Driver Fee) at all, but leads the pack in Base Fares at a whopping $3 fee. As a result, when compared to the average, New York residents can expect to pay anywhere from as high as 80% above the average for a long Uber ride to as little as 70% for a short one.
When compared to most cost-of-living indices, there are two anomalies: Most notably Portland and Las Vegas, which are comparably expensive on the basis of Uber rides, but aren't listed among the top 15 most expensive cities according to the recently released Bureau of Economic Analysis data.
For Vegas, however, this could be explained by the divergence of goods and services, and the cost thereof, demanded by tourists versus goods and services demanded by citizens (like houses). In addition, Uber only moved into Vegas last month, and fares could reprice as the supply of drivers expands. And as for commuting in Portland? I hear it's a bike-friendly city.
The article The 5 Most Expensive U.S. Cities for Uber originally appeared on Fool.com.
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