Steady Increase in Uber Fares

Between NYC and JFK/LGA

Sally Rhee
Carnegie Mellon University

a large sign on top of a large building

Photo by Jon Tyson on Unsplash

Photo by Jon Tyson on Unsplash

NYC attracts more than
60 million visitors annually

June is one of the highest tourist volume months

Around $40 million is spent on
630,000 Uber rides between JFK/LGA and NYC

a view of the wing of an airplane through a window

Photo by Ronile on Pixabay

Photo by Ronile on Pixabay

What Goes into
the Total Uber Fare?

1 U.S.A dollar banknotes

Photo by Alexander Grey on Unsplash

Photo by Alexander Grey on Unsplash

Why is Uber So Expensive Now?

Since 2020, Uber prices have steadily increased, leaving many people wondering why their trips are costing more. From surging fuel prices and inflation to a growing shortage of drivers, the reasons behind these fare hikes are complex. Whether it’s a post-pandemic rebound, new regulations, or Uber’s shift in pricing strategies, the reality is clear:

Uber is more expensive than ever.

Flight and Uber Fare Comparisons

Source: Google Flights, Uber

A one-way flight from Pittsburgh costs less than an Uber to JFK

Potential Factors for the Increase in Uber Fare

Fuel Costs
Rising fuel prices can directly impact driver costs and, consequently, fares

Inflation
General economic inflation can lead to increased costs for drivers, such as vehicle maintenance and insurance

Uber's Pricing Algorithms
Uber's dynamic pricing model can adjust fares based on various factors, including time of day, traffic, and demand

A close up of a car's tail light

Photo by Erik Mclean on Unsplash

Photo by Erik Mclean on Unsplash

Surge Pricing in Fuel

Key Takeaways:

  • Upward Trend (2019-2022): Prices steadily increased, peaking in 2022
  • Potential Factors: Global oil prices, supply chain disruptions
  • Price Decline (2023-2024): Prices decreased, suggesting shifts in influencing factors

How Rising Gas Prices Impact Uber Fares:

  • Increased Driver Costs: Higher gas prices directly impact driver operational costs
  • Fare Adjustments: Drivers may adjust fares to offset increased expenses, leading to higher fares for riders
  • Surge Pricing: Increased demand for ride-sharing during high gas price periods can trigger surge pricing, especially during peak hours or in high-demand areas
  • Driver Availability: High gas prices might discourage drivers, reducing availability
a gas station at night with a lit up gas station

Photo by Maverick Timotius on Unsplash

Photo by Maverick Timotius on Unsplash

The Rollercoaster Ride
of Inflation

Key Takeaways:

  • Inflationary Pressure: Significant inflationary pressure in the U.S. economy in 2021
  • Economic Recovery and Supply Chain Disruptions: The spike in inflation in 2021 could be attributed to these factors
  • Monetary Policy Impact: Central banks may have implemented measures to curb inflation
  • Consumer Impact: The fluctuations have direct implications for consumers' purchasing power and overall economic well-being

How Rising Inflation Rates Impact Uber Fares:

  • Higher Operating Costs: Inflation can increase fuel prices, vehicle maintenance, and insurance
  • Driver Compensation Demands: Drivers may demand higher fares, which can indirectly lead to increased fares
  • Uber's Business Model: Uber relies on dynamic pricing and will adjust its pricing algorithms to ensure profitability

Photo by Check City on Check City

Photo by Check City on Check City

Best Ways to Avoid Paying
High Uber Rates?

Plan Ahead

Schedule your rides in advance to avoid surge pricing

Seek Alternative Transportation

Explore public transportation, carpooling, or airport shuttles

Utilize Uber Pool

Share rides with other passengers to reduce your fare

Keep Yourself Updated on Additional Uber Services

Uber recently announced an $18 shared airport shuttle between LGA and Manhattan

A car parked in front of an airport

Photo by Kenjiro Yagi on Unsplash

Photo by Kenjiro Yagi on Unsplash

Reference

  • Sea the City. "When Is the Best Time to Visit New York City?" Last modified November 23, 2024. https://www.seathecity.com/when-is-the-best-time-to-visit-new-york-city/#:~:text=The%20peak%20tourism%20season%20in,the%20accommodations%20sell%20out%20quickly.
  • Blade. "JFK to LGA." Accessed November 23, 2024. https://www.blade.com/jfk-to-lga.
  • IRoad Genius. "Tourism Statistics for New York." November 23, 2024. https://roadgenius.com/statistics/tourism/usa/new-york/#How_many_tourists_visit_New_York_each_year.
  • New York City Taxi and Limousine Commission. "TLC Trip Record Data." Accessed November 23, 2024. https://www.nyc.gov/site/tlc/about/tlc-trip-record-data.page.
  • New York City Taxi and Limousine Commission. "Data Dictionary: Trip Records HVFHS." https://www.nyc.gov/assets/tlc/downloads/pdf/data_dictionary_trip_records_hvfhs.pdf.
  • Microsoft Power BI. "TLC Trip Data Dashboard." Accessed November 23, 2024. https://app.powerbigov.us/view?r=eyJrIjoiY2FlNjI3YWQtMDkzOS00MjliLTk0MTQtODc2NzU4OTYwNjFiIiwidCI6IjMyZjU2ZmM3LTVmODEtNGUyMi1hOTViLTE1ZGE2NjUxM2JlZiJ9&pageName=ReportSection28c004ce23fc37acd783.
  • Goldstein, Joe, and Michael Schwirtz. "Uber and Lyft Have Raised Their Prices, but New York’s Fares Are Still Among the Cheapest." The New York Times, January 3, 2020. https://www.nytimes.com/2020/01/03/nyregion/uber-lyft-price.html.
  • Uber Technologies, Inc. "Uber Dynamic Pricing." https://www.uber.com/en-GB/blog/uber-dynamic-pricing/.
  • NYC United Limo. "Is Car Service Cheaper Than Uber in NYC?" Accessed November 23, 2024. https://nycunitedlimo.com/is-car-service-cheaper-than-uber-in-nyc/.
  • U.S. Energy Information Administration. "Historical Gasoline Prices in the U.S. (New York Harbor)." Accessed November 25, 2024. https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EMM_EPMR_PTE_Y35NY_DPG&f=M.
  • U.S. Inflation Calculator. "Current Inflation Rates: U.S. Inflation Calculator." Accessed November 23, 2024. https://www.usinflationcalculator.com/inflation/current-inflation-rates/.
  • Quora. "What Percentage Cut Does Uber Take from the Total Fare Cost of a Ride? Do They Subtract a Flat Fee for Each Dispatch or a Percentage? Are There Initiation or Monthly Fees to Be a Driver?" Accessed November 27, 2024. https://www.quora.com/What-percentage-cut-does-Uber-take-from-the-total-fare-cost-of-a-ride-Do-they-subtract-a-flat-fee-for-each-dispatch-or-a-percentage-Are-there-initiation-monthly-fees-to-be-a-driver.
  • Uber Technologies, Inc. "LaGuardia Airport Shuttle." Accessed December 1, 2024. https://www.uber.com/global/en/r/airports/lga/shuttle/.
  • Lerman, Rachel. "Inflation Is Driving Up Costs for Gig Economy Workers. Here's How They’re Coping." The Washington Post, August 7, 2022. https://www.washingtonpost.com/technology/2022/08/07/gig-economy-inflation/.
  • Browning, Kellen. "Why Gas Prices Are Driving Uber and Lyft Prices Higher." The New York Times, March 17, 2022. https://www.nytimes.com/2022/03/17/technology/gas-prices-uber-lyft-drivers.html.
  • Palmer, Annie. "Soaring Gas Prices Are Forcing Some Uber, Lyft Drivers off the Road." CNBC, April 13, 2022. https://www.cnbc.com/2022/04/13/soaring-gas-prices-are-forcing-some-uber-lyft-drivers-off-the-road.html.
  • Uber. "New Fuel Surcharge." Uber Newsroom. Accessed December 1, 2024. https://www.uber.com/newsroom/new-fuel-surcharge/#:~:text=While%20earnings%20on%20our%20platform,out%20a%20temporary%20fuel%20surcharge.
  • Fuel Logic. "How U.S. Gas Prices Affect the Overall Economy." Accessed December 1, 2024. https://www.fuellogic.net/how-us-gas-prices-affect-the-overall-economy/#:~:text=Fluctuations%20in%20crude%20oil%20prices,distribution%20costs%20also%20impact%20prices.
  • Google Flights. Accessed December 1, 2024. https://www.google.com/travel/flights?sca_esv=31e750890f4bca3b&rlz=1C5CHFA_enKR1057KR1065&sxsrf=ADLYWIJsvLlPtWYLJ9QsyJ1wjxt5NfFHiA%3A1733548109776&source=flun&uitype=cuAA&hl=en&gl=us&curr=USD&tfs=CAEQAhoeEgoyMDI1LTAxLTA5agcIARIDUElUcgcIARIDSkZLGh4SCjIwMjUtMDEtMTNqBwgBEgNKRktyBwgBEgNQSVR6aENqUklMWE5FT1hkZk4yeFpWRUZCUTNaV2JsRkNSeTB0TFMwdExTMHRMUzEyZDNsak5FRkJRVUZCUjJSVU1rVXdUbmxvWTJkQkVnTnVRVUVhQ3dqTWhRRVFBaG9EVlZORU9EQnd6SVVC.
  • Uber Technologies. Uber. Mobile app. Version 2024. iOS/Android. Accessed December 1, 2024.
  • Uber Technologies, Inc. "How to Beat Surge Pricing in Alexandria." Uber Blog, April 27, 2022. https://www.uber.com/en-EG/blog/beat-surge-in-alexandria/.
  • Kimberly, Marie. "JFK Airport to and from Brooklyn." TripSavvy, May 28, 2020. https://www.tripsavvy.com/jfk-airport-to-and-from-brooklyn-441574.
  • Gali. Jordi. and David López-Salido. "Monetary Policy Responses to Post-Pandemic Inflation: Challenges and Lessons for the Future." VoxEU. Center for Economic and Policy Research. August 4. 2022. https://cepr.org/voxeu/columns/monetary-policy-responses-post-pandemic-inflation-challenges-and-lessons-future.
  • Federal Reserve. "Inflationary Pressures and Their Impact on the U.S. Economy." Federal Reserve Report, August 2021. https://www.federalreserve.gov.
  • U.S. Bureau of Labor Statistics. "What Caused the High Inflation During the COVID-19 Period?" Monthly Labor Review, 2023. https://www.bls.gov/opub/mlr/2023/beyond-bls/what-caused-the-high-inflation-during-the-covid-19-period.htm#:~:text=The%20combined%20effects%20of%20increased,through%20the%20end%20of%202022.
  • U.S. Bureau of Labor Statistics. "Purchasing Power and Constant Dollars." Consumer Price Index Fact Sheets. Accessed December 1, 2024. https://www.bls.gov/cpi/factsheets/purchasing-power-constant-dollars.htm.
    • TopBuilt with Shorthand