Alice Norton prefers Ubers to cabs. Picture: Simon Bullard
Alice Norton prefers Ubers to cabs. Picture: Simon Bullard

When are taxis cheaper than Uber?

AUSSIES are shunning taxis and flocking to ridesharing platforms like Uber, but one study has revealed they are not always the cheaper option.

The festive season is one time of year where Uber's price surge multiplier can mean rides cost more than double the normal fare, so analysed more than 1800 Uber and taxi journeys across six Australian capital cities to find the surge price point at which a taxi actually becomes cheaper than an Uber.

The research found taxis became cheaper in weekday daytime hours when the Uber surge limit was at 1.4 times the normal price in Sydney, Melbourne and Hobart. In Adelaide it was 1.5 and Perth 1.6, while in Brisbane, Ubers were cheaper right up to a 1.8 x normal price surge.

On weekend evenings taxis became cheaper at 1.6 surges in Hobart and Perth, 1.7 in Sydney and 1.8 in Adelaide and Melbourne. Brisbane was again the best value at 1.9.

The surge prices are hard to understand, according to insights manager Graham Cooke.

"With Uber fares changing based on how busy the streets are, taxi fares changing based on time of day and with different fares for both of these in every city, it can be confusing to know which is cheaper," Mr Cooke said. "A surge ratio of 1.5 means your fare increases by 50 per cent. Generally, it's cheaper to get a taxi in Australia after the surge ratio hits 1.6."

Passengers booking an Uber will be alerted to a surge ratio by the pop-up message "fares are higher due to increased demand". The app shows an estimated fare once a destination is selected, but the surge ratio is only displayed once you select "Confirm Uber X".

"If Uber is surging above 1.5 but you can't easily book a taxi, there is another option ... GoCatch," Mr Cooke said. "The GoCatch app allows consumers to book an economy rideshare car as well as a traditional taxi.

"If economy cars are not available when you book, the app will often upgrade you for free to a taxi."

Alice Norton waits for an Uber in Sydney. Picture: Simon Bullard
Alice Norton waits for an Uber in Sydney. Picture: Simon Bullard

Competition has heated up further in the space, with European-based Taxify launching in Sydney last week and planning to expand nationally. Taxify claims to have 4000 drivers already registered and will discount rides by 50 per cent for the first month. Founder and CEO Markus Villig said drivers and passengers would benefit financially from Taxify's different commission model in which it takes 15 per cent from drivers; reportedly around half that of Uber.

"We're firm in our belief that happy riders mean happy drivers," Mr Villig said.

Alice Norton, 20, from Leichhardt in Sydney's inner west prefers Uber to taxi and said she would be happy to pay 30 per cent extra for most rides for comfort and convenience.

"I love that Uber is upfront, the price is quoted and you know when it's coming," Ms Norton said. "You get that peace of mind that someone is on their way.

"The other good thing is their rating system. I always look at the driver's rating when booking."