Reporter Steven Levy from Wired magazine had an interesting experience at Uber’s annual product event. He decided to take an Uber for a short 2.95-mile ride in New York City, and to his surprise, the cost was much higher than he expected. In a Q&A session with Uber CEO Dara Khosrowshahi, Levy shared the details of his ride and asked Khosrowshahi to guess the cost. The CEO’s guess was way off—the true cost was $51.69. Khosrowshahi’s reaction was genuine, exclaiming, “Oh my God. Wow.”
Levy also pointed out that if he had booked the ride five minutes earlier, he would have paid an additional $20. Khosrowshahi attributed this to surge pricing, but Levy dismissed this explanation. He argued that surge pricing didn’t make sense for a sunny weekday morning with no major events happening. In response, Khosrowshahi mentioned inflation and how it has become a part of everyday life. He emphasized that driver earnings have increased significantly over the past four years due to the cost of time and labor. However, Levy included a side note that according to reports, Uber fares have been increasing at a rate faster than inflation.
The Wired article coincided with Uber’s announcement of its first operating profit in 16 years, for Q2 of this year. The Wall Street Journal reported that Uber made a profit of $394 million in the three months ending in June, a significant improvement compared to the $2.6 billion loss in Q2 2022. Khosrowshahi highlighted that ride volume in the US and Canada has returned to pre-pandemic levels and mentioned that Uber completes an average of 25 million trips per day across its markets, according to Reuters. However, Uber’s shares dropped 6% after warning about pricing competition from Lyft. (Read more Uber stories.)
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