Comparison of the week: Taxi vs Uber

Posted: 8 April 2019 1:35 pm News

Ariel view of taxis in street Image: Getty ImagesIt's the transport debate of the modern age, but which is better?

We compare virtually everything at Finder and our Comparison of the Week isn't afraid to tackle the big questions. This week we take a look at two competing transport options: traditional taxis and Uber, to see which one comes out on top.

It's fair to say the introduction of ride sharing platforms like Uber has transformed how we get around. We can now get from A to B with the touch of a smartphone and pay for it without even getting our wallets out.

But is Uber actually a better deal than a regular taxi? We compare the two based on price, convenience and availability, so you know which one to pick when you next need to get around town.

The essentials

Taxis have a long history in Australia, with motorised taxis first introduced in Sydney in 1906. There are currently around 22,000 taxis in operation. Taxi drivers are effectively self-employed and generally pay the taxi company a fee to use the car. There are a number of taxi companies that operate in Australia, with A2B making up almost half the taxi network through its 13cabs and Silver Service fleets.

You can book a taxi online, by phone or by hailing one down in the street. Some taxi companies, including 13cabs and Silver Service, also have an app that lets you book, manage and pay for your trip online. The fare is calculated using a meter, which increases based on the duration and distance of the trip.

Since its launch in Australia in 2012, Uber has become the go-to transport choice for many Australians (especially city dwellers). The basic service, UberX, lets passengers book rides through the Uber app, then connects them to a nearby driver who is assigned the trip. You can view the driver's details through the app, as well as track their arrival via GPS. Drivers are considered independent contractors by Uber and must provide their own car, while Uber takes a percentage cut of each completed fare, which is locked in at the time of booking.

The comparison

When it comes to getting a ride, most people are looking for reliability, comfort and cost. Here's how taxis and Uber differ on those measures:

Taxi Uber
Price Taxis have a running fare meter, which goes up with time and distance travelled, so it can be difficult to know how much your trip will cost until you get to your destination.

Using Sydney as an example, taxis charge $2.19 per kilometre during the day. Taxis also have different pricing for day and night, with higher rates from 10pm to 6am and a $2.50 surcharge on Friday and Saturday nights.

Similar to taxis, Uber has "surge pricing", with fares increasing based on demand and how busy the roads are (generally weekends or during special events).

While Uber is generally cheaper than a taxi, once the surge ratio is around 1.4–1.6, you may be better off going with a regular taxi, according to Finder research. In Sydney, Uber charges $1.45 per kilometre at normal times.

Since 2018, Uber has used an upfront pricing model, which means you'll know the exact price you'll pay upon booking. However, Uber may charge a cancellation fee if you cancel a trip after the driver has accepted it.

Payment options Payment is made to the driver once the trip has been completed and can be made using cash, card or Cabcharge.

Some taxi companies also let you pay for your trip via an app or by using services like Apple Pay, Google Pay and Alipay.

When you sign up for Uber, you must provide valid debit or credit card details.

Payment is then taken automatically from the card you have linked to your account. You can't pay in cash or use Cabcharge, which might be an inconvenience.

Ride sharing If you wish to share a cab, you can split the payment via EFTPOS or Cabcharge, but otherwise will have to sort out the fare manually among yourselves.

There is a "share ride tariff" that can be applied when you split a cab with strangers, which charges each passenger 75% of the maximum fare to their destination.

However, it may be easier and more cost-effective to agree to split the fare manually.

If using UberX, you can automatically split the fare with your fellow passengers by adding their account via the app.

If you want to save money and are happy to share an Uber with strangers, you can use Uber Pool, which will pick you up along with other passengers.

It's often a lot cheaper than UberX (but might not take the most direct route to your destination).

Availability Booked cabs can be notoriously unreliable, but depending on where you are, there's likely to be a cab you can hail down somewhere nearby. Some taxi companies will have the driver call and text you before arrival.

In regional areas a taxi may be your only option, but you may be waiting a long time for one to arrive.

If you're in a major city, you shouldn't have an issue finding an Uber. However, Uber drivers can themselves be flaky on occasions and the app can often be misleading about how quickly you'll be able to find a ride.

If you're in a non-urban area, there's a good chance Uber won't even be available or you'll be faced with higher rates due to the low driver supply.

Booking in advance You can book a cab in advance by calling the cab company, booking online or with some companies, using their relevant app. If you need to be picked up at a certain time, Uber lets you book in advance. Once you book, you're also shown the estimated time until your driver will arrive.
Convenience If there's a cab across the road, you're free to use it without having to go through the process of booking.

This is convenient if you don't yet have the Uber app, as you don't have to worry about downloading the app to book a ride.

While the app is relatively intuitive and easy to use, it can sometimes be hard to lock down a driver and you'll need reliable Internet access at all times when booking.

Uber does have the advantage of automatic payments, which makes the entire process slightly easier and more convenient.

Comfort It's inarguable the success of Uber was due in part to the often uncomfortable experience offered by taxis. Whether it's an older or messier vehicle, or an unfriendly (or even worse, over-friendly) driver, catching a cab is not always an enjoyable experience.

However, you can also get lucky and find yourself in a modern car with a pleasant driver. It's really the luck of the draw.

Some taxi companies also impose an age limit on their taxis, which means the vehicle must be under a certain age to be used as part of the fleet.

Uber has strict rules around the age of the vehicle that can be used, so it's likely you'll be travelling in a relatively new car.

Drivers are also competing for trips and Uber's infamous 5-star rating system means they're likely to want to make your trip as pleasant as possible (some drivers are known for giving you cold water and mints, which is a nice added benefit).

The rating system should in theory weed out bad drivers, but this doesn't mean you can't still have an awkward or uncomfortable ride.

Safety Cab drivers will have GPS equipped to plot their route and you're free to end the trip at any time.

Taxi drivers must have their ID displayed and many will be equipped with safety cameras. Some cab companies also let you pre-verify the driver using their app, as well as rate the experience using a system similar to Uber.

Taxi operators are also required to have public liability insurance, which covers passenger injury and damage to property.

As with comfort, Uber's rating system adds a degree of security to the platform, as you're given the driver's identity (name and photo) and rating before you begin the trip.

Uber drivers also follow the GPS route determined by the app and you can track this in your own app during the trip.

Uber drivers are also required to have comprehensive third party insurance, but Uber itself doesn't cover personal injury or damage to property.

The lowdown

Overall Uber wins in a lot of categories, but taxis do have some advantages. While there are some exceptions, Ubers are generally cheaper and knowing the price of the fare upfront should give you more certainty. The rating system also helps maintain a high standard for drivers, meaning the passenger experience is likely to be more pleasant than a taxi.

However, the ability to hail a cab off the street is a definite plus in the convenience stakes and if you're in an area not serviced by Uber or you don't have access to a smartphone (or if yours is flat!), a taxi may be your only option. Some taxi companies also have an app that offers similar features to Uber, including pre-booking, online payment and a rating system, but this is not always the case.

We compare virtually everything at Finder, and we're all about helping you make better decisions. Catch up with more of our weekly comparisons, or do your own by heading to the Finder home page to compare credit cards, savings accounts, shopping deals and much, much more. Go on, be a Finder.

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