Uber is profitable — because you are paying too much for your rides. We need more rideshare competition now.

The story

Uber 's financial engine is roaring, having reached its first-ever operating profit. But before we raise our glasses to this transportation titan, there's an unsettling reality to confront.

You know that dreaded feeling when you open your Uber app, hoping for a fair deal, only to be slapped with a surge price? ??

Even Uber's own CEO, Dara Khosrowshahi , was stunned by a $51.69 fare for a mere 2.95-mile trip – nearly 5 kilometers.

His reaction? "Oh my God. Wow.", blaming it on the dynamic prices with which they work in the company.

My reaction? A blend of irritation and facepalming, because there's a fine line between convenience and cost, and in the world of ridesharing, that line is becoming worryingly faint.

The data

To get a better idea of how faint, we ran an experiment: 360 ride requests in Berlin, comparing the top 3 ride-hailing services: Uber, Bolt and FREE NOW, with various locations and at random times of day. We’ve crunched the numbers, and they tell a troubling tale:

9 out of 10 trips, Uber’s prices are higher than their competitors for the same trip

7 out of 10 trips, you’ll get a car to pick you up faster if you don’t use Uber.

So… most of the time, you’re paying a premium for a slower service. No, it’s not an occasional hiccup – you’re witnessing a business model pursuing profitability.

Taking a second look at the data, we notice another thing:

While on average, Uber’s prices tend to be around 15% higher than the competitors, some of Uber’s trips can get up to 2 times more expensive.

How to stop paying too much

Before you toss your smartphone out the window in despair, consider a simple yet savvy strategy: comparing trip offers before taking a ride.

Just as you compare prices and specs before snagging that new iPhone, taking a moment to compare trip offers can revolutionize your ridesharing experience.

Think of it as a life hack for the modern urbanite! Before you swipe to confirm that ride:

• can you ride at a different time to avoid peak pricing?
• is another service offering a better rate?

Take the reins, explore your options, and make an informed choice. With tools and apps readily available, this isn't a time-consuming chore, it's smart urban navigation.

You wouldn't commit to a software stack without comparing options, so why settle for less with your rides? ??

The surge

The end-game success scenario for most ridesharing platforms hinges on being first or a close second in any market to be profitable.

The result? Surge pricing happens more frequently, leading to passengers paying more while the drivers, who are independent contractors, end up making the same or less, as they’re paying a commission for every ride, and that commission is only going up.

And, guess what? Everyone puts up with it. Not because the service is worth the money, but because there are virtually no alternatives to Uber and its main competitors.

The surge… it's not exactly our best friend.

Uber's cost equation is a complex algorithm, juggling demand, location, timing, and perhaps even the weather (not to mention those battery levels that fuel conspiracy theories).

The problem is that you & I, rideshare enthusiasts, we end up paying more. We're hit with premiums without even realizing it ?? and here's a twist: while we pad Uber's bottom line, drivers face some highly questionable practices.

The drivers

They are the backbone of the ridesharing ecosystem, so why are their perspectives on pricing often overshadowed?

For many, premium pricing isn't about greed but rather survival, and you must consider factors like fuel costs, vehicle maintenance, insurance, and fluctuating demand—all served up by an algorithm as unpredictable as a daily special. Some drivers rely on peak hours and surged prices because it's what makes the job viable.

Yet, drivers often face a paradox.

The very algorithms determining their income are a black box, unpredictable and uncontrollable. They might occasionally thrive on premium prices and efficient rides, but what appears as an unfair upcharge to a rider might be the thin margin making a driver's day profitable.

And those who dare decline lower-fare rides? They risk being temporarily banned, or worse. And it’s not only Uber’s behavior towards drivers that is unfair, it’s the other ride-hailing services, too.

Having little competition for Uber is bad for drivers because they have nowhere to go if their account is deactivated. The rides they get through smaller apps are simply not enough to make a living, and the reality for drivers thus often bears little choice but to work with Uber - no matter what prices they dictate.

So.. yes, Uber is profitable now. However, with last year's investigations revealing lobbying tactics and some shady preparedness for police raids, the road's not all too smooth. At the intersection of technology, ethics, passenger premiums, and driver treatment, it's worth asking: How's this journey really being navigated? And are you, as a rider, driver or simply a tech enthusiast, buckled up for where it’s heading?

The competition

Uber's $326 million pre-tax earnings, bolstered by a 22% boost in rides, make a resounding statement: the market is healthy, ridesharing isn't just a passing fad, it's here to stay, and it's growing. But, in reality, it's far from all sunshine and rainbows.

I'm referring to rideshare players like FREENOW and Cabify , which left Portugal earlier this year, or Beat, which shut down their operations in Latin America just 8 months ago. Even the Indian rideshare giant Ola got its valuation slashed by $3.8 billion (52%) a few weeks ago.

And if these platforms are somehow beating Uber at their own game, guess what Uber's response is?

• Buy them out at a premium, like they did with Careem in the Middle East, or
• Strike a deal to save face and turn a profit, as happened with Didi in China

While Uber's aggressively making moves to consolidate power, Lyft is facing a period of particular weakness, struggling with internal challenges and external market pressures, on top of a 70% drop in shares last year.

This decline threatens to widen the gap between Uber and smaller competitors, potentially paving the way for Uber's unchecked dominance. A weakened Lyft means less competition in the US, followed by fewer choices for passengers, and risks to the vibrancy of the entire transportation ecosystem.

The solution

What happened to the idea of fostering competition? When Uber first emerged in late 2008, their pitch deck emphasized how the "Top 4 players combined only 22% of revenues" in the US market. This landscape ignited competition, letting Uber expand aggressively through hefty discounts for riders and heftier cash-burn.

As passengers, we all enjoyed affordable rides, courteous service, cheerful drivers, and quality vehicles, blissfully unaware that we were waiting for the other shoe to drop. So, how has it come to pass that there are only 2-3 apps to choose from in most countries? Why aren't more companies replicating Uber's playbook?

Two reasons stand out: First, achieving even marginal profitability requires billions in investment and over a decade's commitment—a journey not suited for everyone. Second, Uber has regrettably morphed into the very thing taxis were a decade ago, plagued by corruption, ethics breaches, scandals, all topped off with a generous sprinkle of surge pricing.

And there's one more explanation that doesn't garner enough attention: many other apps exist, but they lack the funds or the brand awareness to compete.

That's the motivation behind building Bliq —to level the playing field.

Passengers should have visibility into all available platforms in their city. Even when traveling to a new place, local apps should be readily accessible, whether you've installed them or not, instantly putting you in the know.

• In a hurry? Choose the quickest option.
• Looking for a deal? Sort by price.
• Feeling picky? Explore premium cars.

This approach fosters competition, simplifies decision-making, and encourages informed choices. Broadening the perspective further: drivers gain access to additional sources of income, potentially leading to you paying less and both parties enjoying a more pleasant ride.

The conclusion

No one is suggesting that you should abandon Uber, but wouldn't it be refreshing to have options, just like when booking a hotel or Airbnb?

Are we riding responsibly? Are we allowing technology to guide our decisions without considering the human and ethical dimensions? In a world driven by algorithms, our choices, comparisons, and commitments aren't mere transactions but reflections of who we are and the communities we want to build.

So, the next time you hail a ride, take a moment to navigate not just the road but the broader landscape of technology, ethics, and humanity.

Buckle up, it’s an exciting ride ???

You can download the Bliq comparison app for free from the AppStore / Play Store, or by going to our website: https://bliq.app.

We're also live on Product Hunt today, check out our launch page & give us some feedback ??