The rising popularity of ride-sharing programs such as Uber and Lyft has reduced the cost of travel for many people without access to personal vehicles. Not only has the price of getting a taxi-like service come down, availability has also gone up. Getting an Uber or Lyft in most metropolitan areas is now significantly quicker, easier and more reliable than traditional taxi services. However, with these improvements come some potential drawbacks. Namely, Uber and Lyft have struggled to clearly educate consumers about how to keep costs down when using their services. This blog post offers some simple ways to help ensure you’re getting the least expensive ride available.
Picking the Right Service
For most common travelers, the differences between Uber and Lyft are negligible. Both companies offer a smartphone app that connects people in need of rides to people willing to give rides. Both apps certify their drivers to some minimum standards, and both process payments between passengers and drivers.
Uber has more pricing options than Lyft, but both offer substantially similar low-end pricing options. For example, the author of this blog has taken the same trip in Denver, CO more than a dozen times comparing Uber’s low-end option (uberX) to that of Lyft. While each trip varies by a few dollars depending on traffic, the average price of the trip is almost identical between the two services, with uberX being slightly cheaper overall.
If you’re looking for the least expensive way to get to your destination, you should typically choose uberX (for 4 or fewer passengers) or uberXL (for 5 or 6 passengers) in Uber. Lyft generally gives you the cheapest option by default (the “Lyft” option). If you’ve got 5 or 6 passengers though, you may want to select Lyft Plus, which is more expensive than a normal Lyft, but less expensive than getting two Lyfts.
A note on tipping: Uber discourages tipping drivers, and claims that a 20% tip is baked into every fare. Lyft, on the other hand, encourages passengers to tip by enabling them to tip through the Lyft app. Actual Lyft fares, are actually cheaper than Uber fares for this reason. However, the author finds that after tipping 20% on Lyft, the two service’s base fares are substantially similar.
While both services may be similarly priced under normal circumstances, the pricing between the two can vary dramatically during busy times, when companies might apply surge pricing.
Both Uber and Lyft increase prices when there are more passengers looking for rides than there are drivers willing to give rides. While this practice may seem predatory at first glance, it does increase the incentives for more drivers to get out on the road, making rides more readily available.
Times when you’re likely to see surge pricing take effect are after the ball drops on New Years or after the Super Bowl ends. For reasons outside the scope of this blog, many people are looking for rides at those times, while few people are interested in driving. While it should come as no surprise that surge pricing takes effect at these times, there are other, less predictable times when it comes into effect as well. Luckily, both companies try to give consumers fair notice before charging surge rates.
When Lyft is implementing surge pricing you’ll get a notification like the one below indicating that “+ X% will be added to your total for the driver.” In the example below, 200% will be added to what the fare would be absent surge pricing. If your fare would be $10 under normal circumstances, it will now be $30.
In Uber, surge pricing is a little bit clearer. First, you’ll get a warning indicating a multiple of the original fare. Once you accept that multiple, Uber makes you confirm again by typing the multiple into the blanks on the next screen. In this example, if your normal fare would have been $10, it will now be $22.
The screen shots of the surge pricing indicators of Lyft and Uber were both taken at the same time on a Friday night in Denver, Colorado. The difference between Lyft’s surge pricing indicator and that of Uber made Uber the clear winner on that night.
If you’re looking for the most affordable ride, start by selecting the least expensive options within Uber and Lyft. In Uber, that option is uberX, and in Lyft it is the default “Lyft” option. If surge pricing is in effect on one service, don’t accept a ride before checking the other service. Sometimes one service will charge double or triple rates while the other service is not increasing prices at all.