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Here’s how Uber plans to kill buses

Uber Rates NYC

For right now, Uber is only focused on putting taxis out of business. But in the long run, the company wants to be the ultimate way to get from A to B, and that means challenging public transit like buses. A new option for $5 fixed-rate rides in New York City gives us a peek at how that might work.

UberPool is an existing option that allows multiple riders going to similar destinations to split the cost of a ride. What Uber is now offering in downtown Manhattan is a flat-rate version of the same. For rides starting and ending below 110th Street during rush hour, Uber will simply charge you a $5 flat rate. More importantly, that rate is fixed–no surge pricing. During the mornings, you’ll have to walk to a nearby intersection to get picked up, whereas on nights and weekends, you’ll get taken from door to door.

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With that low, very predictable cost, Uber is positioning itself not as a luxury, but a very realistic option for commuting. Sure, even with the fixed rate, UberPool is more expensive than a subway pass — $5 each way means nearly $300 a month — but it’s a hell of a lot more affordable than taking taxis both ways. For people with a little more money to spend, who value the convenience of an easier commute in a clean car, it’s a good middle ground.

It’s what this might mean for the future of transportation that is more interesting. Buses are, in Silicon Valleyspeak, inefficient and prime for disruption. They drive unchanging routes, with no flexibility to accommodate demand. Uber thinks that by applying a more flexible approach (plus the convenience of a comfy seat and working AC), it might just put buses out of business.

Either way, in the short run, flat-rate UberPool is a pretty killer commuting option for the more well-heeled. Uber tends to test projects in smaller markets before rolling them out worldwide, so if you live in a larger city, your days on the bus might just be numbered.