As a New Yorker, I have been frustrated to see how identical Uber and Lyft rides can be cheaper or extravagantly expensive for my friends and me, even when we’re standing right next to each other.
And a new study has found that these price differences are not just in my head ― there really can be wildly different prices for the exact same rideshare trip.
Travel: We’re Travel Agents. Here Are 10 Things We’d Never Do When Booking A Flight.
According to a new National Bureau of Economic Research working paper, the same Uber and Lyft trips can have a “substantial” price difference of about 14%. The economists analyzed 2,238 real Uber and Lyft trip requests collected by New York City in February to reach their conclusion.
Here’s what you need to know, and the one simple action you can take to save money on your next Uber or Lyft ride.
Here’s How Much You May Lose By Not Price-Comparing Both Apps
Checking both Lyft and Uber apps before booking a ride can save you a significant amount of money, the study found. Illustration: HuffPost; Photos: Getty
What’s interesting is what didn’t help save riders’ dollars or time. On average, paying more didn’t mean you waited less for a ride, and neither Uber nor Lyft turned out to be regularly cheaper.
“There’s a whole bunch of times that Uber is more expensive, and a whole bunch of times that Lyft is more expensive,” Michael Luca, a professor at Johns Hopkins University’s Carey Business School and one of the study’s co-authors, told me.
Travel: Are Budget Airlines Less Reliable? Experts Reveal What You Should Know Before You Book.
In the NBER New York City audit, the average price gap between Uber and Lyft rides was approximately $3.50, which can add up to a lot of money over a year of rides. Luca noted that the dollar difference depended on the length of the ride; longer rides typically had larger price gaps.
We riders are the ones who pay the biggest price when we don’t compare Uber and Lyft price quotes. The economists estimated that New York City riders forgo about $300 million in potential annual savings ― about 6% of total gross bookings ― by not comparing prices between the two platforms.
Based on the audit, customers usually checked Uber first about 54% of the time. But it would help their wallets to check both Uber and Lyft. Luca said the study’s results suggested that consumers who took 100 rides would save about $177.74 per year if they always price-compared, compared to those who didn’t.
“Everybody would be paying that much less in a world where you could sort of frictionlessly compare between the two [apps],” Luca said.
Finds: AirTags Just Hit Their Lowest Price Ever — And This Is A Good Deal
Very Few Of Us Compare Lyft And Uber Prices, But We Really Should
Both Uber and Lyft told HuffPost they don’t coordinate prices with each other. Lyft’s Sid Patil, executive vice president of the rideshare company’s marketplace division, told me this 14% price variation is due to “real marketplace dynamics.”
“At any given moment, we may have more drivers available in a specific area, different demand levels, or different promotional activity,” he said.
Uber disagreed with the NBER methodology and said the price variations are how “a competitive marketplace works.”
“The underlying study misstates that two trips are ‘identical’ based solely on pickup and drop-off points,” said Harry Hartfield, head of product policy at Uber. “This fundamentally misunderstands that the price is determined by platform-specific conditions, such as how many drivers are currently active, where they are in relation to the customer, how many other customers are requesting similar trips, and more.”
Travel: 31 ‘Destination Dupes’ You Should Consider For Your Next Trip
The NBER economists concluded in the paper that a reliable price comparison tool could help riders more easily price-check, which Uber’s terms of use prevent third-party services from doing.
Uber’s Hartfield said price comparisons “are still very easy to do.”
But if price comparisons are “very easy,” why are so few of us doing it? Luca noted that only 16% of customers in the price audit who opened one rideshare app also opened the other, and he said this finding suggests that it may not be easy for consumers to readily price-compare.
Luca thinks that, in general, many tech companies believe that if it’s harder to search and find for things, “then customers should be able to overcome that friction. And I think that there’s a growing body of evidence that little frictions could actually pose real barriers to customers,” he said, citing how a federal judge ruled in 2024 that Google broke the law by making it harder for consumers to use anything but its search engine as the default.
Finds: This Is The Lowest Price We’ve Seen Apple AirTags Since July
“Part of the value of the digital age is enabling more frictionless search. So the more we could do that, the better off consumers are going to be,” Luca said.
In the meantime, it’s up to us riders to check both Lyft and Uber if we have them, so that we can avoid paying more for the exact same trip. Taking a few extra seconds to open up both apps is a little more inconvenient, but as this study suggests, the savings can be huge.
Related…
Read the original on HuffPost