After a very long wait, ride-hailing services Lyft and Uber have arrived in Western New York.
Ride-hailing apps are an awesome innovation for consumers. They have applied technology to the laws of supply and demand to completely transform the transportation industry. That usually means much lower prices and faster pickups than traditional taxi cabs.
But it doesn’t mean Uber and Lyft always have the lowest prices. Sometimes, they can cost more than a taxi.
One of the reasons ride-hailing apps are so efficient is because they use dynamic pricing. When rides are in highest demand, prices go up.
Using surge or variable pricing, the app immediately figures out the highest price the market can bear at any given moment.
That means Lyft can charge up to 400 percent more than it usually does for an identical trip at another time or day. Uber’s surge pricing can increase by even more than 400 percent.
The higher prices (with the incentive of making bigger profits from higher fares) encourage more drivers to hit the streets at times when passengers need them most.
On a recent Friday afternoon, I looked to see how much a fare would cost to take me from the newsroom downtown to the Buffalo Niagara International Airport in Cheektowaga, 12 miles away.
Between 2:30 p.m. and 4:15 p.m., Uber’s fares fluctuated from $20.14 to $23.91. Lyft’s went from $18 to $30. A traditional cab, which charges set, regulated rates, would have cost about $36. In this case, either app would be cheaper than a cab.
But during peak times, when Lyft can charge up to 400 percent more and Uber has no cap on how much more it can charge, the cab could cost a lot less.
However, peak times for Uber and Lyft are likely peak times for cabs, too. If you’re in a faraway or undesirable pickup area, you might get passed over by cabbies for a closer fare and get stuck waiting.
Try these tips to save money:
iosMaps. Type your location and destination into the Maps app on your iPhone. Choose the “ride” option (as opposed to “drive”, “walk” or “transit”) and price estimates for both Uber and Lyft will pop up (as long as both apps are enabled). When comparing prices, remember that taxis charge about $3 per mile.
Google Maps. Book your first ride with Google Maps and get it for free, using a promo through the “ride” option.
Uber discounts. Get your unique referral code from your Uber app (tap “free rides”) and share it with friends on social media. They’ll get $5 off their first three rides and you’ll get $5 off your next three rides. The discounts expire 90 days after they’re issued.
Lyft discounts. Tap “free rides” on your Lyft app to get your referral code and share it. Lyft gives you the option to upload your phone contacts and share your code via text, or you can just copy and paste it on social media and share it that way.
If you haven’t taken your first Lyft yet, the company has issued promo code LYFTLOVE17 for $5 off your first ride.
Download the driver apps. You’ll have to actually sign up to be a driver in order to use them, complete with background check and social security number. But in this mode, you’ll be able to see where the highest demand is. In some busy places, walking a couple of blocks could put you in a lower fare zone.