Uber and other ridesharing companies make money by taking a share of every trip charged through their phone apps. Uber keeps 25% of each fare booked through its app, while its rival Lyft takes 20%.
Uber sets different rates for every city. The fares vary according to the immediate demand for rides and the user's choice of vehicle and service.
How Uber's Pricing Works
Uber relies on a surge pricing strategy that increases rates during times of peak demand. That draws more drivers to take to the roads to claim fares. Once peak demand is met, the fares gradually decrease.
In New York City, the Uber estimator quotes prices ranging from about $39 to about $60 from Times Square to Laguardia International Airport. The city recently passed a law requiring ride-sharing services to pay its drivers a minimum of $17.86 an hour.
The Uber app collects the fare by credit card before the driver arrives, and collects an optional tip for the driver afterward.
Beyond Ride-Sharing
Uber is branching out with a variety of services, some relying on its network of self-employed drivers, which the company estimates numbers about three million worldwide as of mid-2019.
The most familiar service, UberEats, picks up and delivers takeout food to customers. In Los Angeles, its restaurant selection as of mid-2019 was dominated by fast food and Chinese takeout. Uber currently competes with DoorDash and GrubHub in the food delivery business.
Other business ventures include UberFreight, an app that matches shippers with carrier services, and Uber for Business, a version of the ride-sharing app that is tailored for routine business use. A similar venture, Uber Health, focuses on arranging transportation for medical patients and staff.
The company is testing additional "mobility options" including electric scooters.
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