Uber CEO stunned by the high cost of his own app in NYC

Ride-hailing apps like Uber and Lyft increased their prices by 92 percent from 2018 to 2021

Uber prices have risen significantly in the past few years — so much so that even Uber CEO Dara Khosrowshahi was shocked when he learned how much riders have to pay to travel the shortest of distances.

According to Steven Levy, editor at Wired, he took an Uber ride from downtown New York to the West Side to meet Khosrowshahi at an annual product event, called Go-Get last May. The ride, which was roughly 2.95 miles (roughly 4.74 km), ended up costing him $51.69 USD (roughly $69 CAD).

After the event, Levy sat down with Khosrowshahi for an interview and quizzed him as to how much he paid to get to the event. Khosrowshahi said “Twenty bucks.”

When Levy revealed that he paid $51.69 USD for the trip, including tips, Khosrowshahi exclaimed. “Oh my God. Wow,” he said. Levy added that the fare he paid was his second try. Upon his first try, he was quoted a price that was $20 higher, to which Khosrowshahi replied by saying “Yeah, surge pricing.”

However, Levy pointed out that it was “10 am on a sunny weekday” and there was no apparent reason for the surge. Khosrowshahi defended the high prices by saying that they reflected the rising cost of living and labor. He claimed that most of the fares go to the drivers, who now earn 40 percent to 50 percent more compared to four years ago. He also said that inflation was affecting everyone and everything.

However, as shared by CNBC News, ride-hailing apps like Uber and Lyft increased their prices by 92 percent from 2018 to 2021, which better explains the high fare for a 4.74 km ride.

Further, the company is no longer targeting growth. Instead, it wants to secure profits and is no longer subsidizing rides. However, the company has reached a record number of drivers worldwide, which should technically lower the demand-supply gap.

Image credit: Shutterstock

Source: Wired Via: BusinessInsider