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You are here: Home / Cold Hard Facts / Why Is Uber So Expensive? (5 Reasons)

Why Is Uber So Expensive? (5 Reasons)

By Janet Jacobs February 19, 2021 @janetjacobs1919

View on Uber car

 

Uber can be a very convenient way to get from point A to point B.

The problem is that, as with all convenient things, the pricing eventually starts to increase quite a bit.

Uber seems to be getting more and more expensive, and many people want to know why.

We have researched and found the top five reasons Uber is so expensive.

These reasons will help you understand whether or not Uber is worth it and exactly why they have to charge so much.

 

Why Is Uber So Expensive?

 

1. Location

Uber logo on Huawei P9

 

Uber is not the same price in all locations.

In fact, the more you pay for an Uber, the more likely you are to be in one of their prime locations.

If you want to take an Uber in New York City, it will cost you much more money than taking an Uber in rural Connecticut.

The reason behind this is that the most popular locations can get away with charging more.

In these big cities where Uber is very popular, Uber drivers will use their income as a full-time way of making a living.

In fact, many Uber drivers will tell you that they make a good living as an Uber driver.

However, in areas where people are not asking for Uber rides all that much, the job tends to be a bit more of a side gig where people are trying to make a little extra money.

The impact on overall salary and income is not going to be quite the same.

If you are planning a trip to a highly populated city or a place that will require frequent Uber trips back and forth to the beach, plan to pay more.

The more well known and highly populated a location is, the more you will have to pay for your ride.

 

2. Supply and Demand

Demand and Supply

 

Another thing that will increase the price of Uber rides is the concept of supply and demand.

If there is a special event going on like a St. Patrick’s Day Parade, people are going to need more rides to and from the event.

You may look for a price of an Uber ride on that holiday and notice that the numbers are almost twice as high.

When the demand for Uber rides is very high, the supply is low, and therefore, the pricing will go up.

Both the drivers and the Uber company can benefit from these times and try to make a bit of extra money.

If you are needing services when the supply is low, you will have to pay quite a bit more.

This is a concept that is well known across any industry.

For instance, if you need a ride at 2 pm, it may be a bit cheaper than something at 10 pm.

Some people will try to plan out their days a bit to make sure that they can afford the Uber at the time they need it.

You would be very surprised how much a rate can change throughout the course of the day.

If you plan on using Uber during high traffic times, commuting times, or inconvenient times of the day, you can probably expect to pay a bit more. different

It’s important to remember that Uber drivers are saving us from several different things.

For some people, owning a car is not a reality, but it is still necessary for them to get from point A to point B.

For some, this could mean traveling on public transportation for hours to go only a few miles.

An Uber driver can solve this problem.

For other people, a vacation may be too expensive if it requires the use of a rental car, and Uber can solve this problem.

Then there are those who want to go out to a party and not have to worry about the dangers of driving home after drinking alcohol, so the Uber driver can fix this issue.

With all of the great benefits that Uber drivers can offer, they truly can increase their prices and charge what they need to survive.

 

3. Rate of Pay for Driver

Similing driver talking with female passenger

 

The pay of the driver is something that Uber takes care of.

Of course, there are also tips involved that are going to help cover the pay of the driver as well.

In addition to the money that the driver makes, they are going to have their own expenses on their cars.

Essentially, as a company and as an individual, there are fees that Uber has to cover.

Without charging the right amount for their services, Uber would not be profitable, and the drivers would not be profitable.

With new changes to minimum wage, the pricing on some of the Uber driver’s rides will probably increase.

The rate of pay for an Uber driver was initially quite low, with many working for tips.

As time has gone on and the need for Uber drivers has increased, the pay rate has increased.

Right now, gas prices are down, so Uber drivers are making a bit of extra money.

However, in rural areas where the trips are quite long from one place to another, it can be hard for Uber drivers to make the money that they need.

When a driver is helping you solve the problem you have at that moment and get you to your desired destination, it is hard to argue that they are making too much money.

Remember, too, that Uber drivers are using their own car and essentially allowing you to come in it.

They maintain their cars so that they are clean and tidy and make people feel comfortable.

Of course, part of this is to get a better tip, but it is also to help improve the overall experience of being in an Uber vehicle.

Most people will admit that the service they receive with Uber is quite good.

The drivers are well trained, and those who do well happen to enjoy their job.

There is quite a bit of flexibility in how and when they work, and it can become an enjoyable experience.

However, there is no avoiding those fees of making the overall business model work.

These fees and overhead are certainly part of the expense that is transferred to the end user.

 

4. Marketing

Uber's new headquarters advertising seen in Mission Bay

 

Marketing expenses for Uber can get quite high.

The idea behind their brand is to let more and more people think about using Uber as a safe and reliable means of transportation.

The introduction of Uber into the marketplace has made it easier for people to travel and commute, and it has truly changed the mind of many about the necessity of owning a car.

Many families are able to go in one car because they don’t have to worry about being left without a ride.

Uber’s prices actually turn out to be a bit better than owning a car entirely.

Essentially, Uber wants everyone to know that their services are the perfect solution.

These marketing costs are high in our current day and age.

Digital marketing is quite expensive, and it only gets more expensive each day.

Companies truly have no option but to market themselves.

Marketing helps create brand awareness and to develop the tone of the company.

The problem with marketing is that it adds to the total price for the end user, yet it is necessary for the company to be able to make money.

 

5. Insurance

young man in suit showing an insurance policy

 

Last but certainly not least are the insurance costs of owning a business such as Uber, which are very high.

In addition, not only do all drivers have to have their own insurance but so does the parent company.

When you think about all the things that could go wrong owning a business like Uber, your mind may start to hurt a bit.

Truly, this is a business that needs tons of insurance.

The more insurance you need, the higher the costs of the plans and, of course, the higher the cost of the ride you get from Uber.

You have to imagine that, each time you step into an Uber, part of what you pay for is the overhead costs to keep the business running.

If Uber had no insurance, they would not make it through the end of the day.

There are constant battles and issues that they need to clear up, and the insurance and legal team help them to do that.

Without these teams, they would have a hard time making it, and you would not have access to Uber rides.

Insurance is something that you will be glad that Uber has, but it is part of what makes them a bit more expensive.

 

How to Save Money on Uber

A woman hand holding Uber app

 

If you are tired of paying a lot of money for Uber, there are a few ways you can save money.

The easiest and most effective way is to sign up for both Uber and Lyft.

When you do this, you can compare the price of the trip you want to take between the two companies.

Choose the one that has the lower cost, and you will end up saving quite a bit of money.

Like anything else, comparing prices and shopping around is going to pay off in the long run.

Another way to save money when using Uber or Lyft is to avoid peak times and peak days.

If you can choose to take your rides just a little before or after these peak moments, the savings will be significant.

Many times, promotions are run to try and get people to sign up for Uber or Lyft.

If you have friends who are not currently signed up for either of these services, you may earn some extra money or rebates by getting them to sign up.

Lastly, it can sometimes make sense to share a ride because, if you share a ride, you can decrease the overall costs that you pay.

Of course, it is best to do this when you are sharing with people you know and feel safe with.

This is an excellent idea for those who are traveling to work and have coworkers who can all chip in and share an Uber together.

Maybe they can set it up so that one person pays one day and another the next.

 

Conclusion

Hopefully, you can now see why Uber is as expensive as it is.

The pricing is significantly high due to the high expenses incurred by the driver and the parent company.

If you want to save money, it is best to avoid peak travel times and look for coupons and deals.

Keep in mind that, as expensive as Uber seems, it is probably cheaper than purchasing a vehicle and all the costs involved with that.

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Filed Under: Cold Hard Facts

About Janet Jacobs

I bring a passion for whatever I write or do and am always looking to learn a little more each day. Lover of all things outdoors and appreciate the little things in life.

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