Ridesharing

Uber Price Spike Revealed In Chicago

Uber Price Spike Revealed In Chicago

Although ride-hailing companies like Uber and Lyft strive to keep pricing strategies secret, a Chicago law requires the disclosure of fare data, Reuters reported on Tuesday (Nov. 26).

Chicago has seen a significant increase in the cost of rideshares over the past year, although prices for single riders have remained relatively unchanged, according to an analysis by Reuters.

The price hikes primarily apply to Chicago’s low-income neighborhoods, where there is a higher demand for carpool rides. Although the Chicago data doesn’t separate rides by company, estimates by Second Measure, which tracks credit card expenditures, show that Uber commands about 72 percent of Chicago’s ride-hailing market.

Uber reviewed the data and told Reuters its carpool option is losing money for the company. Uber CEO Dara Khosrowshahi said earlier this month that the company was “losing significant sums” due to steep discounts on pooled rides.

An Uber spokesperson said, “We want Pool to be available to as many people and in as many cities as possible, and to do that it has to be financially sustainable for years to come.” He pointed to improving the algorithms to find more carpool riders, as well as looking at pricing measures.

Lyft told the news outlet that since Uber controls the majority of the Chicago market, the data is a reflection of Uber’s strategy.

Via, a smaller ride-hailing rival in Chicago, has about 1 percent of the city’s market share. “In city after city, we have seen that there is far more price sensitivity with pooled rides than with private, single-passenger ones,” Via said after interpreting the data.

Upping taxes for solo trips while lowering them on shared rides is one approach to congestion that Chicago Mayor Lori Lightfoot proposed on ride-hailing services. She is also calling for a surcharge of $1.75 on weekday rides in the downtown area.

Although Uber and Lyft have supported congestion taxes in other cities, both are fighting Lightfoot’s proposal because it excludes traditional taxis.

Despite congestion pricing in New York City, Uber and Lyft posted their biggest month ever. Uber completed 17.3 million trips in March and Lyft completed 4.7 million.

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