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Cambridge University: Below a $35 Fare, Taxis Beat Uber

Only after riders spend $35 on cab fare is it less expensive to take an Uber in New York City, according to researchers at Cambridge University, UK.

Only after riders spend $35 on cab fare is it less expensive to take an Uber, according to researchers at Cambridge University, UK.

Thanks to a Freedom of Information Act request, scientists were able to compare the cost of all New York City Yellow Taxi journeys during the whole of 2013 against Uber pricing using the cheapest version of the service, called Uber X.

The data set obtained by researchers is impressive in scale, detailing every pick up and drop off as well as the fare paid for hundreds of millions of journeys through the city. 

“Uber appears more expensive for prices below $35 and begins to become cheaper only after that threshold,” says Cecilia Mascolo, professor of Mobile Systems at Jesus College.

In a place as dense as New York City, shorter trips are the norm, suggesting that Uber exploits this trend in human mobility to maximize revenue, says Mascolo. 

If that leaves you feeling a little exploited, you’re not alone. When internet entrepreneur and author Andrew Keen spoke with Big Think, he warned that Uber’s allegiance to free market principles actually risks creating a monopoly that makes the consumer worse off:

“Uber represents a much more dangerous monopoly. The reason why Uber is valued at $40 billion, the reason why billions of dollars of Silicon Valley and Wall Street money have poured into Uber is because it’s a play actually controlling the entire global cab transportation industry. Uber is not for the people; it’s not for the consumer.”

Researchers at Cambridge are optimistic about the potential of harnessing large pools of data like annual taxicab fares. Programmers could build an application, for example, that compares car journey prices in urban locations the way websites compare airline fares:

“[W]e take our analysis a step further by proposing a new mobile application that compares taxi prices in the city to facilitate traveler’s taxi choices, hoping to ultimately to lead to a reduction of commuter costs.”

Read more at Technology Review.


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