Here's Why Uber Is so Much Cheaper in Some Cities Than Others

Uber transport application on a mobile phone
Photo: Photo by Juan BARRETO / AFP) (Photo by JUAN BARRETO/AFP via Getty Images

There’s a reason why your Uber costs a lot more in New York City than it does in Dallas, and it all has to do with local laws.

If you take a look at your bill after an Uber ride, you may notice some interesting discrepancies between fees, depending on where you are. According to the Huffington Post, Uber is a “transportation network company (TNC),” which are regulated differently from state to state or city to city.

So, if you take an Uber in Los Angeles, as opposed to Chicago or New York, you might see some specific, local fees added to your bill. According to the Huffington Post, each government entity that oversees regulation of rideshare companies (this can vary greatly as to who’s in charge in what city), has its own rules in regards to TNCs.

Certain local governments have been at odds with Uber and other ridesharing apps. In California, according to the Huffington Post, new laws have sought to reclassify Uber drivers from independent contractors to full-time employees, which creates a lot of extra costs for the company itself.

The list of different fees in different states and cities is long and varied, but there are a few distinct differences in particular large markets. In California, for example, there are two fees that show up on every bill, the Huffington Post reported. First is the 10-cent Access For All Fee, which goes towards increasing the number of wheelchair-accessible vehicles. The second is the Marketplace Fee, which is for “connecting riders and drivers within ‘certain markets’,” according to the Huffington Post.

Chicago has similar fees, including an “Accessibility fee,” which is comparable to the “Access for All Fee” in California, as well as a ground transportation surcharge and congestion surcharge for those traveling to the Central Business district. In New York, where Uber seems to be constantly battling the local government, there seems to be quite a laundry list of fees that make even driving within Manhattan an astronomical price point.

According to the Huffington Post, not only is there a congestion fee in Manhattan, there is also a Black Car fee (to support The Black Car Fund, a sort of worker’s insurance for for-hire drivers); an “Out Of Town” fee, which is any ride that starts in Manhattan and ends in one of the other boroughs (which, if you ask a lot of New Yorkers, is not actually going “out of town”); and a four percent TNC fee that is added for rides that start in Manhattan and end anywhere else in the state.

Next time you wonder why you’re getting all these extra surcharges and fees, you can assume that they’re there because of local laws that seek to regulate Uber and other apps. Either way, the buck gets passed to the drivers themselves, who are often underpaid despite the high prices of rides.

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