When is it cheaper to take a cab and when is it cheaper to take Uber?

Taxis in Times Square, New York City
Flickr user prayitno

Everyday commuters as well as many travelers have become accustomed to pulling out their phones and "hailing" a car from Uber. The service and app are so simple and have caught on in so many cities that Uber has come to embody the disruption that so many Silicon Valley start-ups seek to achieve. Each week seems to bring new reports about taxi companies protesting against Uber (and its rivals Lyft and Sidecar) or states or city councils declaring the ride-sharing service illegal. On the other hand, a large portion of the population, especially those who are 40 years of age and younger, wouldn't think twice about getting an Uber over hailing a regular cab.

But is Uber the best choice for those on a budget (surge pricing aside)? Data researchers at the University of Cambridge in the UK say it depends.

Cecilia Mascolo led a team of data scientists at Cambridge who conducted a study of Uber cabs vs. New York City's famous yellow cabs using a data set of hundreds of millions of rides in both NYC taxi cabs and cabs operating under the Uber X banner, Uber's lower cost service. The report, detailed in MIT Technology Review, revealed that regular cabs may be cheaper than Uber when it comes to short haul rides:

"Comparing it with Uber’s price at any instant is straightforward. Mascolo and co took the co-ordinates of each journey made in a Yellow Taxi in 2013 and then asked Uber how much it would charge for the same journey using the cheapest version of the service, called Uber X.

"Uber then suggested a minimum and maximum possible fare, which Mascolo and co used to take an average. They then compared this figure against the Yellow Taxi fare.

"The results make for interesting reading. 'Uber appears more expensive for prices below 35 dollars and begins to become cheaper only after that threshold,' say Mascolo and co.

"That’s interesting because human mobility is characterised by vast numbers of short trips and relatively small numbers of long trips. 'This observation therefore suggests that Uber’s economical model exploits this trend of human mobility in order to maximise revenue,' say Mascolo and co.

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