Every day it feels like things are becoming more and more expensive. The cost of living is sky rocking across the globe. Airfares are soaring, hotels and Airbnb’s are going up by the day, and fuel costs are hitting record levels.
Everything seems to be going up. Unfortunately, transportation services are no exception. Ride-sharing company Uber has made a lot of changes in recent weeks with the hopes of expanding its business model.
Soon, however, the cost of ordering an Uber will cost you a lot more than it did a year ago.
When Uber first broke into the market in 2011, it quickly became a rising star in the tech field as well as becoming a favorite app for millions of Americans.
People who commuted for work, traveled for business, or simply just needed a ride home late at night, it seemed like everyone wanted to use Uber – and rightfully so.
It was an ingenious idea that became popular not just because it was convenient, but also because it was affordable!
Finally, could you get around town without having to pay an arm and a leg. No more heckling with opportunistic taxi drivers for a lower fare. No more waiting outside in the blistering cold, hoping you’d get picked up by a taxi.
At last, Uber came and seemingly took over the industry by storm – it was what society needed.
And for a while Uber was just that, tremendously affordable. Unfortunately, it seems like those days are over.
Uber was affordable because it was heavily subsidized by investors but over the course of the past years, Uber has consistently lost a significant amount of money, including more than $30 billion the five-odd years since the company’s finances became public.
The solution? Higher costs passed on to consumers.
Rides have been getting—and will continue to get—more expensive. Average Uber prices rose 92 percent between 2018 and 2021, according to data from Rakuten; a separate analysis reports an increase of 45 percent between 2019 and 2022.
Both Uber and Lyft have added a surcharge for riders that helps drivers account for high gas prices.
A once rising star in the transportation industry
It isn’t too farfetched to believe that Uber was burning all that investor cash in order to corner the market.
Once it killed off car service, taxi cartels, and its ride-hail rivals, the company would stop charging riders less than it was paying drivers and prices would have to go up.
This week an Uber from Manhattan to JFK Airport was $100—nearly double the fixed yellow cab rate. But take a guess how long it’ll take you to find a yellow cab.
The fundamental problem Uber and Lyft keep running into is that most people are not willing to pay the fares it would cost to run a profitable taxi service with the overhead Uber and Lyft require.
At the end consumers are the ones who are suffering
Uber fares are at a record high with no end in sight. What once was a convenient and affordable way to get around town, turned into something a lot more expensive and burdensome for people.
For years we were made to believe that one can take a 20-minute drive and only pay $7 for it.
Clearly that is no longer than case and consumers will have to take a very hard look at whether or not they’re willing to pay the price for Uber now and in the future.
Top 10 Most Expensive Uber Cities in the U.S.
- New York
- San Francisco
- St. Luis
- San Luis Obispo
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