UberX, still illegal, promises prices 20% below cabs

Israeli law prohibits the ride sharing service.

January 5, 2015 16:13
2 minute read.

Uber. (photo credit: REUTERS)


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The Uber ride-sharing service, UberX, may still be illegal under Israeli law, but that hasn’t stopped the company from forging ahead and offering prices it says are 20%-40% below regular cab fares.

Uber’s regular services, like those of competitor GetTaxi, allow users to order a cab with a smartphone app and pay with a pre-programmed credit card. UberX, however, has ambitions to turn regular drivers into cabbies.

Though UberX is popular in some countries, it is still illegal under Israeli law, where drivers without a cab license are barred from selling rides.

UberX fares in Israel will start with a base price of NIS 8, and add another NIS 1 for every minute on the road and NIS 2 for every kilometer driven. Standard cab fare, in comparison, starts with a base of NIS 12.3, plus NIS 5.3 for ordering the cab and NIS 4.4 for each suitcase.

Fare increases in standard cabs are a complicated affair, charing NIS .3 for every uptick on the meter. If the cab’s speed is higher than 5 km/h, the upticks are determined by distance: the first after 538 meters, then another every 79 meters until 15km, after which upticks take place every 65m. If the taxi is cruising below 5 km/h, the upticks are based on time, with the first registering after 80 seconds and each subsequent one at 11-second intervals. The standard cab rules also include higher prices between 11:00 p.m. and 5:30 a.m.

The regular Uber service adheres to these rules.

According to Uber calculations, their UberX fare structure would lop 20%-40% off the cost of rides, with one short ride in Tel Aviv clocking in at 42% below.

Of course, if there’s bad weather, heavy traffic, or other adverse conditions, Uber’s infamous “surge pricing” could kick in. That mechanism, which the company anticipates will apply in Israel, ups the rate when there are sudden spikes in demand.

Yet for all its planning–including a drive to start hiring UberX drivers–the ride-sharing may never come to fruition. An Uber spokeswoman said that there is no news of progress in adjusting regulations, and could not comment on how the impending election might interfere with such steps.

“In Israel, you can never know,” she said.

In the meantime, Uber has been trying to lure prospective customers to its service with discounts. Through the end of 2014, it gave riders a 20% discount, and continues to offer coupons to members who sign up friends.

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