Taxi Hailing Apps: Fees and Surcharges to Watch For

by  Darren Murph | Dec 17, 2013
Taxis in NYC
Taxis in NYC / deberarr/iStock

We’ve already covered the best and brightest in the taxi hailing app world, but knowing which apps to download is only half of the battle. It's also worth understanding why using a taxi app is a fundamentally different experience than hailing a cab the old-fashioned way. Case in point: this past weekend, as New York City dealt with the hectic pre-Christmas shopping rush, as well as several inches of accumulated snow, Uber found itself on the wrong side of a PR controversy. According to multiple reports, the wintry weather caused Uber taxi drivers to begin implementing “surge pricing” that caused some fares to start at $125 (instead of the usual $2.50).

To avoid sticker shock the next time you need a taxi in a pinch, here's a quick breakdown of how pricing works when hailing a ride in the digital universe:

Check the fare: Unlike conventional cabs, which generally charge the same flat rate regardless of circumstances, taxi hailing apps utilize dynamic pricing. In other words, fares rise and fall by the second depending on the supply of available cars and the surrounding demand; if demand skyrockets while the supply of cars dwindle, you could end up paying 5 times the typical fare for your ride. That’s what happened this weekend with Uber, with some riders seeing rates of 8 times the standard fare. The good news is that these apps give you the power to recognize the current price before you commit. In the Uber app, just tap on the car icon along the bottom of the screen to see a pop-up of the current rate. Be mindful not just of the base fare, but also to the transit rates below; if the weather is awful, you’ll end up paying stratospheric surcharges while waiting for traffic to move.

Check the car: In New York City, hailing a yellow cab the old-fashioned way could net you a minivan, an SUV, or a four-door sedan. The fares for those vehicles remains consistent, but that isn’t how taxi hailing apps operate. With Uber in particular, you can select an SUV, a four-door sedan, or a smaller car (called “UberX”). Rates vary dramatically between vehicle choices, with UberX rides being the least expensive. Not surprisingly, it’s oftentimes difficult to find an UberX car that’s available, at which point the app will default to a typical four-door sedan. Be careful not to commit to a ride in a vehicle that’ll cost you more than you’re comfortable with.

Think twice before committing: When hailing a cab on a street corner, you can usually have the driver roll their window down in order to engage in a brief conversation. Perhaps you can haggle a bit for a long, out-of-town ride, or you could ask him or her how bad traffic is if heading to the airport. At the end of that conversation, you can opt to pass up the cab without any damage to your wallet. With taxi hailing apps, you’re on the hook for at least a small monetary outlay (typically $5 or so) once you hit “confirm.” In other words, as soon as the driver is in motion, there is no undoing the action without penalty. Sure, you can cancel before the driver arrives, but your credit card will be dinged between $5 and $10 for inconveniencing the driver. Make sure you’re absolutely ready for that ride before hailing via an app!

City dwellers — any other must-know tips on wrapping your head around all applicable charges as they apply to taxi hailing apps? Let us know in the comments section!

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