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April 16, 2024

Laurine Woy

High Tech Automotive Solutions

Uber vs Taxi – The Cost-Effectiveness of Ride Sharing


There’s no doubt that Uber is the big player in ride sharing. It’s a household name among millennials and has been growing steadily ever since its founding in 2009. However, there are still some people who use taxis instead of Uber because they think it’s cheaper. To determine which option is actually more cost-effective, we’ll compare the costs of getting a taxi versus an Uber ride in New York City*. Let’s dive right into it!

The Cost of a Taxi

If you’re looking to compare the cost of an Uber ride with a taxi, you’ll first need to figure out how much a taxi costs. The price of taking a cab varies depending on where you are and what kind of vehicle you’re riding in, but let’s assume that your average fare is $5 per mile plus an initial charge of $2-3 for the trip.

The average taxi driver salary is about $200-$300/day (or $50-$75/hour). If a driver works 8 hours per day 5 days per week, then their annual earnings would be about $24k-$36k before taxes.

But wait–there are expenses! In addition to paying yourself as an employee, there are other overhead costs associated with running your own business: gas and maintenance costs for both yourself and any vehicles; insurance; licensing fees; advertising expenses…the list goes on and on! All told? Your average cabbie has about 20{a5ecc776959f091c949c169bc862f9277bcf9d85da7cccd96cab34960af80885} profit margin left over after all those expenses are taken care of.*

The Cost of Uber

Uber has a flat fee, which means that no matter how long you take or where you go, the fare will be the same. The cost of an UberX ride is $2 per mile and $0.25 per minute (plus an initial base fare). If you want to share your ride with other people going in the same direction as you and save money on gas costs, then UberPool is your best bet!

UberX vs Taxi – Cost Comparison:

$15 – UberX trip from Los Angeles International Airport (LAX) to Universal Studios Hollywood (UHollywood) with 4 passengers ($7 each) = $50 total cost

$20 – Taxi trip from LAX airport to UHollywood with 4 passengers ($5 each) = $40 total cost

Why is Uber Cheaper?

The answer is simple: Uber has a higher supply of drivers than taxis. In fact, there are more than 2 million active Uber drivers in the US alone (compared to about 500,000 taxi drivers). This means that if you need a ride in an area where there are lots of people who want rides and few other transportation options (like downtown Chicago during rush hour), you’re more likely to get one through Uber than through any other service.

The next reason why Uber is cheaper than taxis comes down to two factors: 1) Uber drivers aren’t employees–they’re contractors; 2) they don’t have any benefits or expenses associated with running their own business. Taxi companies require their employees to pay for their own cars, maintenance costs and fuel costs out-of-pocket before they ever see any money from fares paid by customers like yourself! That’s expensive stuff!

Ride sharing is cheaper than taxi services.

Ride sharing is significantly cheaper than taxi services, and it’s more convenient.

In some cities, Uber can be cheaper than taxis. In other cities and countries where taxis are much cheaper than in the U.S., ride-sharing might actually be more expensive than taking a cab. The bottom line? Ride sharing is a great option for many people–but not all of them!


Ride sharing is the future of transportation. The cost effectiveness of ride sharing services like Uber and Lyft makes them a better option than taxis. Ride sharing companies make more money per ride because they don’t have to pay drivers as much money, but they also keep fares low enough that customers can afford them without breaking the bank.