Damien Roue / Flickr

The difference in cost is negligible, but the convenience gap remains.

Hailing a ride with Uber is already very convenient, but ideally Uber would like that ride to be cheaper than a traditional taxi, too. That was certainly the goal of a July 2014 promotion in New York, when the company slashed fares on its non-luxury UberX service below those of yellow cabs. Still, new research suggests that, on the whole, UberX remains a bit more expensive than its conventional competitor.

A team led by Vsevolod Salnikov of the University of Namur in Belgium has conducted what it calls the "first head to head comparison" of UberX and yellow cab fares. Salnikov's crew gathered a dataset of origins, destinations, and fares of yellow cab trips taken in New York City in 2013. Then, using API access granted by Uber in August 2014, they determined how much the same trip would have cost on UberX.

In a working paper they report that, on average, a yellow cab was $1.40 cheaper than an UberX car. A more fine-grained analysis showed that UberX trips were slightly more expensive until fares reached $35, at which point they became the cheaper option. Insofar as fares serve as a proxy for trip length, then in New York at least, Uber appears to be making money on short journeys to cover the cost of longer ones.

The comparison is far from perfect. The NYC yellow cab trips occurred in 2013, whereas the UberX trip calculations were done in 2014. UberX fares were calculated as the average of the minimum and maximum fares produced by the API queries. Those queries also couldn't be controlled for trip time, and therefore couldn't capture the surge pricing that can further boost Uber fares.

But the study raises interesting urban mobility questions nevertheless. Wonkblog's Emily Badger (who spotted the work) writes that being cheaper than a traditional cab "matters most for Uber's long-term success" and suggests that UberX might win the head-to-head matchup if New York City regulators didn't require all drivers to be commercially insured and licensed. Notwithstanding the decline in public safety that might follow such deregulation, it's not clear that price is Uber's only path to victory in the Manhattan taxi market.

The simple fact is taxi prices for single-passenger rides can only go so low. The recent history of city-run paratransit rides, which do provide a great service but also cost a great deal of public money, shows you can't run a car service at transit prices. It's just very expensive to have one human being drive around another, especially if you intend to pay these humans fairly (which some drivers, who have joined a class-action lawsuit against Uber, argue isn't currently the case).

So if Uber wants UberX rides to be cheaper than yellow cabs rides, its best option is to slash fares artificially, as it did in July 2014. That might give the service a slim advantage on paper. But the difference might not matter much to cab riders, who are already concerned with time as much if not more so than price, and it might fall to pieces entirely once Uber's investors come calling for a profit.

In truth, Uber's real advantage over yellow cabs, where it exists, remains not price but convenience. The company has adopted a smarter model of connecting drivers and riders that taxi officials in New York have been hesitant to emulate despite having the technological capacity to do so. What matters most for Uber's success, then, is not necessarily being cheaper than traditional competitors, but being so far ahead on everything else that the competition doesn't bother trying to catch up.

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