The savings from using the UberX ride service vary wildly from city to city in Canada, a new survey finds — and there are times when using Uber won’t save you anything.
The10and3.com researched ride fares in nine of the 10 Canadian cites where UberX operates (it skipped Halifax due to limited UberX service) and found the savings versus a cab are largest in Toronto, where an UberX ride costs you about half what it costs to take a taxi.
That makes Toronto the city with the largest UberX discount compared to taxi fares. It’s followed by Ottawa in second place (44 per cent discount) and Montreal in third (41 per cent discount).
At the other end are Quebec City and Hamilton, where an UberX ride will save you less than a third compared to a taxi.
The survey offers two theories as to why this is. The first is that taxi prices are so high in Toronto, Ottawa and Montreal “that Uber can easily afford to undercut taxi rates by 40 to 50 per cent without breaking a sweat.”
As evidence, the survey points to research showing that Toronto has among the world’s priciest cabs, and it, along with Montreal and Ottawa, have higher cab fares than New York, L.A. or Paris.
The other theory is that “Uber is strategically selecting large markets in which they aggressively pursue market share by offering rock-bottom prices,” The10and3.com says.
“The company has been known to dip into its deep coffers to keep drivers on the road (for example, by paying their tickets). In Toronto, at least, the company appears to have succeeded in building an impressive market share,” The10and3.com says.
When Is Uber Not Cheaper Than A Taxi?
When it’s engaged in surge pricing. Raising prices during a sudden spike in demand for rides is among Uber’s most controversial policies. Though the company says surge pricing is designed to entice drivers onto the roads when they’re most needed, many consumers’ advocates complain the practice is exploitative.
In most cases, taxis are the less expensive option during price surges, the survey says.
“As a rule of thumb, when surge prices pass the 2x mark, begin looking for a cab.”
The political fight between Uber and Canada’s taxi industry continues unabated. Some cities, including Toronto, are looking at changing regulations to allow UberX to operate legally and within regulations.
But the cab industry is opposed to allowing Uber to operate without having to abide by all taxi regulations (including price), while Uber itself is unlikely to accept being regulated as a taxi service.
In the meantime, municipal authorities have been running stings on Uber drivers and seizing vehicles that they say were operating as taxis without a licence. Montreal has reportedly seized 400 Uber vehicles this year.
A new tactic involves taxi companies calling for Uber drivers, then reporting their vehicles to the drivers’ insurance companies.
Some insurers have reportedly started cancelling Uber drivers’ policies, saying the policies don’t cover use of the car for commercial purposes.