Recently, Wired’s editor, Steven Levy, took an Uber for not even 3 miles to meet Uber’s CEO, Dara Khosrowshahi, in downtown New York City. When Levy arrived, Khosrowashahi asked him how much the ride cost, and when Levy told him he paid $51.69, including tip, Khosrowashahi was shocked.
Uber CEO’s exact words were, “Oh my god. Wow,” while Levy noted, “It’s 10 AM on a sunny weekday, and it’s not like the president’s in town.” Levy also informed Khosrowshahi that when he first entered his destination, Uber quoted him an additional $20 that, luckily, he didn’t have to pay.
But while the two discussed the expensive ride casually, the truth is that Khosrowashahi is well aware of the surge in ride-share prices. According to data collected the price of an Uber ride increased by 92% from 2018 to 2021. Although the data suggested that prices would return to normal in a post-pandemic world, that has not proven to be the case.
Experts state that the incredible increase in price is due in large part to inflation, as well as the fact that Uber is no longer subsidizing rides.
However, Uber and CEO Dara Khosrowashahi want to make it abundantly clear that most of the money consumers are paying for rides is actually going into the pockets of the drivers. Khosrowshahi told reporters recently that “Earning per week for our drivers are up 40,50 percent over the past four years because that is the cost of time and the cost of labor. I think that’s positive.”
But a UCLA Labor Center study found that from February 2019 to April 2022, the average fare for an Uber passenger in New York City increased by 50%, while the average driver pay only increased by 31%.
Previously, Khosrowshahi stated that the increased fare prices are also due in large part to a shortage of drivers, but we now know that is simply not true. Uber recently reported that they now have more than 5 million drivers worldwide, and Khosrowshahi told the press that, “We have a very strong flow of new drivers who are signing up, coming on to earn.”
So if it’s not a shortage of drivers and it’s not due to the pandemic, why are ride-share fares becoming so much more expensive? According to Khrosrowshahi, even though he was shocked by the price of a 3-mile ride, it’s just the way the economy is right now. “Everything is more expensive,” he said, “Inflation has become a part of our everyday life,”
Inflation has changed the prices of everyday items such as groceries, rent, and of course, the cost of living overall, and Uber rides are no exception. So next time you take an Uber ride, you’ll likely be astounded by the price tag and say to yourself, “Oh my god. Wow.” But unfortunately, it doesn’t seem like prices are going to go back down any time soon.