Uber has announced that it’s carpool service is now $5 dollars in Manhattan below 110th street during the commute hours of 7-10AM and 5-8PM, Monday through Friday.
As part of the lower price, Uber is now requesting passengers walk to specific intersections to align rides more efficiently. TheVerge has reported that Uber is using this as “a pilot” although there is no end date in sight.
Uber Has Competition from Via
Uber won’t be without competition, however. There’s another ride-sharing startup that has the exact same idea. It’s a company called Via and they just raised $70 million to challenge Uber for the burgeoning carpooling market.
Both Via and Uber essentially work the same but Via “has developed software that aims to make carpooling more effective.” It does this by “using data and smart algorithms to put more people in cars along heavily trafficked routes at a price that is closer to the cost of public transit.”
It’s that “public transit” that might give some commuters pause. After all, aren’t they using ride-sharing services like Uber so they can avoid that?
Perhaps, but Via especially sees an opportunity here. Their app will pick up multiple passengers at set locations and then drop them off at similar set locations.
Sound like a bus stop?
Many are beginning to wonder if Via and Uber’s carpooling service is operating more as a high-end bus line.
That’s what many passengers will probably think as they’re walking several blocks to the Uber pick-up/drop-off locations.
Are $5 dollar Rides in New York Sustainable?
Another aspect of Uber’s carpooling service is its sustainability.
Currently Uber admits that each driver will be paid the same amount for taking passengers, even though Uber is charging just $5 for the service. “Uber could end up eating $20–30 per fare,” we’re told in the Verge article, but we’re also reminded that Uber “has raised over $10 billion in capital and is valued at $62.5 billion.”
That’s a lot more money than Via has, and if Uber wants to corner this carpooling market all it has to do is keep those $5 fares in place until Via can no longer compete financially.
At that point Uber can go and buy up whatever valuable infrastructure or systems that Via has developed.
Honestly, with $62 billion as a company value, and no real plans in the works to treat drivers more as employees instead of freelance contractors, it’s likely Uber’s value will only continue to rise.
Whether large-metro areas like New York think that carpooling for $5 is worth it remains to be seen.
After all, isn’t it just a high-end bus service? Ube and Via don’t think so, and they’re banking on the fact.