Uber’s new carpooling service makes rides even cheaper – if you walk a little

Uber’s recent financial reports revealed that its fourth quarter saw reduced losses for the ridesharing giant. The company earned nearly $11.1 billion in gross revenue in Q4 2017, up by $1.4 billion from Q3 2017 and nearly double the figure from Q4 2016. However, it is worth noting that Uber POOL, the company’s much-touted carpooling service, has never been profitable since its launch in August 2014. But the service’s low pricing, especially compared to other Uber services, continues to attract price-sensitive riders across the world. Now, Uber is hoping to attract more customers by offering even cheaper rides – in exchange for a little walking and waiting.

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Uber yesterday announced the official launch of Uber Express POOL, a new carpooling service that will reduce fares from POOL rates by 20-30 percent. The service has been running as a trial in San Francisco since November, and is now available in Washington D.C., Los Angeles, Miami, Philadelphia, San Diego, and Denver, with more cities across the US to be added in the coming weeks and months. So how exactly does the new service work?

Uber POOL is a door-to-door carpooling service where drivers drive around to individual pickup locations for customers travelling in the same direction or on the same route, and then drop them off at their respective destinations along the way. Express POOL changes this system by using a completely new algorithm to match users travelling in the same direction. Based on their destinations, the app then picks a common pickup point for all riders on a trip. Users have to walk to the pickup point where the Uber cab picks them up and then drops them off at a destination that’s accessible to all riders’ final destinations. Riders then walk from the drop-off to their destination.

The new service will be offered in tandem with the existing POOL service, and riders have the option of choosing whichever one they prefer. However, Uber believes that most price-sensitive riders will eventually choose to walk a little in order to save on fares, driving the success of Express POOL.

While there are currently no plans to launch the service worldwide, Indian users will find the offering very familiar – it’s quite similar to the Share Express service offered by Indian ridesharing company Ola. A major differentiator though is that Ola Share Express works along fixed routes that passengers can walk to/from for their pickups and dropoffs. However, Uber Express POOL is powered by a completely dynamic algorithm; this means that pickup and dropoff points and routes may vary depending on who you’re matched with for any given trip. Successive trips from the same area might have different pickup points each time, a different sort of carpooling system offered by US competitors such as Via and Chariot.

Uber has resisted comparisons between its carpooling offering and existing public transit systems like buses. However, the company’s new service appears a shift towards a micro-transit mode of transportation. In an interview to The Verge, Ethan Stock, Director of Product for shared rides at Uber, said, “We think carpooling is very much the way of the future...Not only for our service, but we think the transformation of car ownership towards carpooling is going to be tremendously beneficial for cities, for the environment, for all the reasons that we’re very familiar with – congestion, pollution, etc.”