Uber launched a new service last week, UberXL, which allows larger parties to secure Uber vehicles large enough to transport them around the city. Is this another play by Uber to squeeze more money out of its users? Uber XL, which is being billed as a service for cars with room for up to six passengers, was introduced in both Boston and Chicago on Thursday along with another service, Uber Family, which was rolled out in New York City. (Uber Family is a service that has an option for families to request a car seat.)
What seems a little odd is that Uber is creating a pricing tier specifically for its larger cars, like Honda Pilots and Toyota Siennas, that are already available through the lower cost UberX. If a user of UberX, the company’s cheapest service, happens to get a larger vehicle due to the proximity of the driver to the pickup location, that customer doesn’t pay a higher fare.
Is Uber, the company that will often add “dynamic pricing surcharges” to ride costs during busy hours like St. Patrick’s Day night or New Year’s Eve, trying to take advantage of consumers with another arbitrary pricing scheme?
Let’s look at the numbers.
Here is the pricing for UberX (which could be a minivan):
- $2.25 (base fare) + 28 cents/minute + $1.45/mile + $1 safe rides fee (*a fee to ensure that your driver isn’t a psycho, as far as Uber can tell)
- $5 minimum
By comparison, here is the rate for Uber XL:
- $3.50 (base fare) + 35 cents/minute + $2.45/mile + $1 safe rides fee
- $7 minimum
The next price tier, for UberBlack is :
- $7 (base fare) + 40 cents/minute + $3.60/mile + $1 safe rides fee
- $15 minimum
(NYC’s UberFamily has a $10 surcharge, which was covered by Boston’s own Care.com over Mother’s Day weekend.)
At 2 p.m. on Thursday, the fare for a ride from Faneuil Hall to Harvard was between $27-$33 for the higher end UberBlack, $13-17 for lower-cost UberX, and $19-$25 for the new UberXL service.
While it does seem like Uber may be manipulating the system, the idea of having a higher rate for a “requested” larger vehicle is not something that Uber invented. It already exists in Boston.
Steve Sullivan of Boston’s MetroCab said that if a customer requests a larger vehicle, there is a $6 surcharge. (Sullivan said it was a standard rate for the city that can be found on the Boston Police Department’s Hackney Carriage Unit’s cab rate information page. However, I couldn’t find anything about the van surcharge, but maybe I just missed it.)
But, much like Uber, if a someone hails a larger vehicle from MetroCab, like a minivan, there is no extra charge.
Lauren Altmin, the senior communications associate for the Midwest at Uber, said that the higher rate was due to the higher operating costs that drivers with larger vehicles have. I guess, she must be referencing the higher cost of gas due to the poor miles per gallon of minivans, but your guess is as good as mine as to what the higher operating costs actually are.
Altmin also said that there are a lot of families in Boston who want to use the service but are worried about getting a smaller car like a Toyota Prius and that there is consumer demand for larger vehicles that can fit more passengers.
“UberXL is a way to guarantee that you can have larger car,” she added.
What do you think? Is UberXL something in high demand or is Uber playing games with pricing again here?