How Much Does Uber Cost? A Detailed Guide
With Uber attracting attention recently, many are asking “how much does Uber actually cost?”
Since this has become such a hot topic, we’ve put together a complete guide to Uber pricing so you can have a better understanding of the pricing model.
In this article, we will be covering all the important categories below:
- Uber Rates & Pricing Variables
- Vehicle Types and Uber Rates
- How Much Does Uber Cost Compared to a Taxi?
- How much does a Lyft cost compared to Uber?
- How do you pay for an Uber?
- What types of payment does Uber accept?
- Is Uber profitable?
- How much does Uber pay their drivers?
- Upfront Pricing
- Uber Estimator
- Sample Uber Fares
- Bonus: Promo Codes
Uber Rates & Pricing Variables
In general, estimating a fare is pretty straightforward, if you have the right tools to do so. Before we start, understanding how Uber calculates their fares is important.
There are several factors that come into play when determining the final price.
First off, there is the Base Fare. This is a flat fee that covers the initial price of a driver actually accepting the request and picking a passenger up. Next up, Uber keeps track of time spent in the vehicle during the trip.
This is the total sum of minutes multiplied by a per minute price, which varies per location.
The duration of time spent getting from point a to point b is not the same as how many miles driven in most cases. Due to this, Uber takes into consideration the distance that traveled on the ride.
Once there is a final amount of miles, that figure is then multiplied by the local per minute rate.
Besides these charges, a non-situational amount, dubbed the Booking Fee, is then applied. This is a flat fee that helps offset administrative costs, such as background checks and any overhead costs.
Once calculated, there are two final situational costs that come into play, SURGE and tips.
The multiplier varies based on demand and location. If SURGE pricing is in effect, the other charges we mentioned above will be multiplied by the current amount. For example, if your fare is $8 and SURGE pricing is 1.5x, your total fare before tips will be $12.
Which brings us to tips. If your driver went out of their way to make your experience grand and you feel like they deserve a 5-star rating, tip accordingly.
On-cash or via the app is much appreciated. Bear in mind, if you elect to pay via the app, the charge will is then added to the total cost of the fare.
Combining the above factors will reveal your official fare amount. According to Uber, they use the following formula to calculate all fares:
((base fare + time rate + distance rate) * surge multiplier) + tolls and other fees
Having said that, it is important to keep in mind that the rates you receive will vary based on the type of vehicle you request. Now that you know, let’s break the calculations down even further.
How is the Base Fare calculated?
Akin to most of the charges, the Base Fare varies from city to city. What one person pays for an UberPOOL in Chicago will most likely be different for someone in Los Angeles. To get a better idea of how much the Base Fare is in your local area, be sure to check out this informative link.
What is the Uber Safe Ride Fee?
Introduced in 2014, the Safe Ride Fee helps offset the cost of driver background checks, vehicle inspections, and insurance premiums. Behind the scenes, there are a lot of potential applicants that are applying to become a driver.
Each time someone applies, the rideshare company foots the bill. Over time, the number of applicants has made this expense quite large.
There are designated locations where drivers can take their vehicle for an inspection. Paying these mechanics racks up a hefty charge, hence the Safe Ride Fee. Although this charge is low, starting at $1 per ride, some areas have actually seen the fee as high as $2.50.
How Much is the Booking Fee for Uber and What is it?
At one point, the Booking Fee acted in the same manner as the Safe Ride Fee. This separate fee of $1 was added to each ride for similar purposes as the Safe Rides Fee. Once Uber implemented the Safe Rides Fee, they removed the booking fee as well.
Vehicle Types and Uber Rates
As we mentioned before, the type of car you select plays a major role in how rates are calculated. For example, the fare you pay for an UberPOOL will be much, much lower than the rate for an UberBLACK or Uber XL.
Having said that, riders that request an UberPOOL exchange their time for the low rate. Be sure to take that into consideration when making your request.
Another major factor that determines the price is the location of the rider. Each city has its own unique price tag per fare. Due to this, there is no standard price for a ride.
To get a better idea of how much a ride will cost in your area, check out Ridester’s Uber Fare Estimator tool. Riders can use this to get a ballpark estimate of how much a ride will cost them in any location for any type of Uber.
How Much Does Uber Cost Compared to a Taxi?
Uber’s fleet of drivers are independent contractors. Which means they are not given a set schedule among other things.
Taxi services are given a schedule, as well as an hourly wage, and benefits. Due to these expenses, taxi services need to make a certain amount of money per ride otherwise they will go out of business.
Because of this looming fact, the average price for a cab is much higher than it is to pay for a ride request. Having said that, if you are ordering one of the high-end vehicles, your total cost may be more than what it would be to hail a taxi. Of course, you pay for what you get when trying to get a high-quality ride, such as an UberBLACK.
Data from Certify provides an insider look at what the average prices are across the board. Below you will find the monetary details for the average cost of a ride via a rideshare or taxi company:
- Average Uber: $25.73
- Average Lyft: $19.20
- Average Taxi: $29.52
For more information on the average price for a ride in 2017, check out this article from Ridester.
How much does a Lyft cost compared to Uber?
Lyft is a rideshare company that provides similar services to Uber. Although they are similar in a lot of ways, the business method they use is different. Having said that, the average price for a Lyft is about the same as an Uber. On average, the cost per mile is $2, and trips start at about a $1 base rate.
How do you pay for an Uber?
The process of paying for an Uber ride is done through the app. According to the Uber website, setting up a credit card payment can be done in the following steps:
What types of payment does Uber accept?
When it comes to accepting money, Uber is pretty versatile. The rideshare giant accepts the following methods of payment:
- Most major credit cards
- Apple Pay
- American Express Points
- Gift Cards and Vouchers
Is Uber profitable?
Short answer: It depends. Uber drivers earn different amounts based on their location, the type of ride requests they accept, and whether riders tip.
For example, a driver that accepts UberBLACK ride requests in New York City will make more than an UberX driver in Iowa.
Yet, drivers have options available to them that make it possible to earn more money, such as sign-up bonuses and referrals. To-date, both rideshare companies have incentives for new drivers. These hefty bonuses are a great way to help new drivers out as they get familiar with the gig.
For more information on how you can become a rideshare driver go here.
How much does Uber pay their drivers?
On the other end of the fare is a driver that gets to make a profit from the trip. Although drivers do not get to keep the entire sum earned, they do get to keep a large part of it.
On average, Uber pays their drivers 75% of the total fare, after deducting a “rider fee” which is the other 25%. Outside of this amount, drivers are able to keep 100% of the tips they earn.
From the amount earned for the ride plus tips, drivers earn enough to cover all their expenses. This includes anything they need to help run their business, from gas to car insurance.
Now that we have reviewed the factors that go into the fare pricing, let’s take a look at how that data is used to calculate a fare. Recently, the company rolled out a new form of pricing called Upfront Pricing.
This new feature was supposed to be a game changer for drivers. Unfortunately, Upfront Pricing led to a lot of pushback from drivers. Riders were being overcharged, which resulted in fewer people using it.
According to QZ.com, “the total upfront fares paid by riders were that much higher than the fares used to calculate driver pay. The company lost money on UberPool, its carpooling service, but more than made it up by overcharging customers who booked trips on UberX and its other private ride options.”
For more information about how Upfront Pricing has changed the market, check out this article.
You Might Also Like: Uber Promo Codes for New Users
With this pricing model, the price you see is what you will pay. Besides this overcharging, there are other downsides to the model, too. For starters, the rideshare company has made it a bit more challenging to see when SURGE is in effect.
Now, instead of big bold notifications that would alert you of the multiplier, Uber gives limited warning. This may be attributed to passengers being charged more money than normal.
To add insult to injury, Upfront Pricing has not increased drivers’ cut of the profit. Instead, drivers are actually making less than expected. Budget-friendly riders will wait until SURGE is over to assure they can avoid it or use other tricks.
Uber Upfront Pricing Lawsuit
Although some riders are feeling pretty good about the Upfront Pricing, it has resulted in a lot of controversies. Many have suggested that Uber is playing favoritism or charging certain riders more based on their pick up and drop off locations.
This has slowly escalated to a high-profile lawsuit against the company. The main focus of the lawsuit revolves around whether Uber calculates two different prices for any given fare.
Examples include what the rider or driver sees as the total and fare for frequent vs infrequent users.
Lyft Upfront Pricing
Akin to Uber, Lyft offers an Upfront Pricing option to riders. The goal is to simplify the cost of a ride before it is even taken.
Upon entering a pickup location and destination, the app calculates the total ride cost based on the following:
- Prime Time
- Any applicable promotions
Although there are a lot of factors that go into calculating the price of a ride, there are tools that do most of the heavy lifting for you.
Since it appears that the Upfront Pricing may not be reliable, riders can use a third party calculator to make sure they are getting a fair price.
Uber App Price Estimate
If you are interested in seeing an estimate via Upfront Pricing, follow these steps:
- Open the app
- Input the destination you’d like to end up at
- Verify your pickup location on the map
- Once entered and verified, you’ll see a list of vehicle options populate
- Tap the one you want an estimate for, and a fare estimate will pop up
Although this is a helpful way to estimate a fare, there are a few noteworthy drawbacks. For example, if you are a frequent rider, the amount you see may be a bit more than what an infrequent user would see.
Plus, there are times when the display is not as clear as it could be.
Uber Calculator Estimate
Since there is so much controversy surrounding the Upfront Pricing feature, it may be worth your time to double check your ride fare. To do this, consider using a third party estimator, such as the one created by Ridester.
This tool taps into the official Uber API to provide a ride estimate based on the stats in your area. Plus, it is an easy way to get a ride estimate before you actually request a ride.
As an added bonus, the Fare Estimator from Ridester has loads of other related features you can play around with.
For example, users can find out what a ride costs in another city or see the most popular destinations are in their area. The Fare Estimator even has a way to share the estimated fare with your friends so you can compare ride prices.
Sample Uber Fares
Let’s apply everything we have learned so far to a real-world scenario. We have chosen Denver as our location using UberX and the UberSUV vehicles.
In our example, we are going to travel from Coors Field to Mile High Wine Tours, which is a distance of 2.61 miles. See these charts for more info.
After plugging this city-specific data into our Fare Estimator, we can see that an UberX ride barely makes it past the minimum rate, whereas the cost of an UberSUV is much more. This is as expected considering the differences in service levels.
Bonus: Promo Codes
New riders that have not used a the rideshare service yet are in for a real treat! You can offset the expense of an Uber ride by downloading the app and claiming one of the current promotions.
Once you have it entered, you will see the free ride credit amount reflected in the “Payment” part of the rider app.