On Friday — the day when Uber went public — I requested an Uber X to go 1.8 miles at 12:45 p.m. from my home in downtown Chicago. The cost was was known up front: $16.39.
I was surprised by the price and assumed there was a justification for surge. After riding, it didn’t seem justified from my perspective.
Road conditions were perfectly clear. Weather conditions were perfectly clear. The driver showed up in about five minutes (he was in the process of dropping off another rider about four blocks from me). The ride took about five minutes. And what should have cost about $8 ended up being more than twice the amount. Disappointing? Yes. Does the app offer an option for me to question the price itself? No. And a licensed taxi would have cost about $9, including tip.
Did Uber raise rideshare rates on the day it went public?
Rideshare service companies have their eyes on a new direction: They are now technology companies that want to disrupt more than the taxi industry. Uber began as a publicly traded company on Friday, May 11, 2019 – closing the day at $41.43 per share and a market cap of just under $70 billion. Lyft was the first to be publicly traded just a few weeks ago on March 29, 2019. It closed on the same day at $51.09 and had a market cap of $14.9 billion.
It certainly means that travelers and investors are valuing these options for the long term. But it’s important that these companies remember that they grew out of the idea that rideshare services can save money over the price of taxis. And it’s certainly worthwhile to support the drivers who are our entrepreneurial neighbors, using their vehicles to make some extra money or determine if they can make enough money to do it full time.
But is Uber and Lyft as cost effective as what brought these companies to their prominent position today? At least as of today, Uber and Lyft still need to rely on short distance riders and other innovative delivery services to continue to grow in value. Let’s hope they aren’t missing that point.
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(Image courtesy of Uber)