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Uber vs. Taxi: Which Is Cheaper?

But there are many times when a taxi is a better alternative. For quick trips when the fares are below $35, for instance, a city of south bend taxi could be the cheaper option. Such trips account for about 94 percent of taxi fares, Noulas says.  

Watch Out for Surge Pricing

A taxi is likely to also be the better option when demand is high. That’s because during such times, Uber and rival services such as Lyft rely on surge pricing to boost fares by up to four times the price. The theory is that by allowing drivers to charge a premium, more drivers will get behind the wheel, which will help meet demand from passengers.

Surge pricing can happen more often than you’d expect in some high-traffic neighborhoods, such as New York City’s Times Square. Noulas says the practice affects about 25 percent of UberX cars—the budget option for riders—in New York City. The result is that the median price for a yellow cab ride in New York, says Noulas, is $19.50 versus $23.50 for an UberX ride.

Even without surge pricing, UberX can be more expensive than taking a taxi, especially for shorter trips. Uber charges a minimum fare of $8 for simply getting into the car, compared with $2.50 for New York’s yellow cabs. UberX is still often more expensive even after you take into account tipping taxi drivers, Noulas found. Uber drivers typically don’t accept tips.

Source: By Aimee Picchi