Uber, the startup that provides on-demand limousine service using a smartphone, has ferried customers all over urban areas Now the company wants to bring its luxury sedans to suburbs as far-flung as Willowbrook and Winnetka, Ill.
San Francisco-based Uber launched Chicago service in September 2011 with 40 drivers ready to accept fares. It has since added hundreds of drivers to its roster and introduced a lower-cost taxi option.
The company's expansion of its flagship "black" service to Chicago's suburbs is one of its first forays into areas beyond densely populated city centers, although it does have operations in Palo Alto, Calif., and has experimented with a seasonal offering between the Hamptons and New York City.
Allen Penn, Uber's general manager in Chicago, said the startup noticed thousands of instances in which customers located in the suburbs searched for cars via its mobile application.
"In some cases, they've been able to get lucky and get a car," he said. "But for the most part it's not been the type of experience that we strive for; it's not been short pickup times and high availability. This is something we know we wanted to address."
As suburban service gets under way, pickup times should be 10 to 20 minutes. As Uber signs up additional drivers, the wait should fall to less than 10 minutes, matching what a customer requesting a downtown Chicago pickup would experience, Penn said.
Pricing is the same as in the city, with a starting fare of $7 for a sedan and $3.50 per mile when the vehicle is traveling more than 11 miles per hour. An SUV carries a higher base fare of $14 and a per-mile cost of $4.50. Uber stores customers' credit card information so that no cash changes hands. The company does not directly employ its drivers, instead acting as a middleman and paying them a cut of fares.
The company spent a couple of months building out its behind-the-scenes technology to accommodate the larger area in Chicago.
Uber prides itself on its "math department," or its engineering team, which designs algorithms to predict real-time demand, estimate pickup times and efficiently match passengers with roving drivers. In the case of Uber's local operations, the system makes sure that cars are dispatched to customers only in areas where they're permitted to do so, as drivers need a specific license for pickups within Chicago city limits.
Uber's not the only company eyeing the suburbs. Hailo, an app-powered taxi dispatch service that originated in London and has expanded to 9 cities globally, has more than 500 Chicago cabs ferrying customers every day. John Thompson, Hailo's general manager in Chicago, said the company plans to start suburban service within a couple of months, at the latest.
Uber and Hailo believe they can spark demand for car service between suburbs, giving consumers a transportation option for special occasions or eliminating the need for a designated driver.
The use of limo services, particularly in the suburbs, isn't a part of Chicago transportation culture as it is in other cities such as New York. But Hani Mahmassani, director of the Northwestern University Transportation Center, said the young, affluent and tech-oriented consumers that represent Uber's core consumer base in cities might be inclined to try a suburban offering.
"If you're going out for a nice dinner on a Friday evening and you don't want to take your car ... using your extra bucks for a clean car might be nice," Mahmassani said. "There's definitely a latent market there where they could do well."
Erica Trzeciak, 26, lives in La Grange Park, Ill., and works in Chicago at GiveForward, a crowd-funding startup. She has taken Uber sedans to the Metra station after going out in the city or attending a Blackhawks hockey game, and she also called up the service to get around Boston during a business trip. Trzeciak said she's looking forward to trying out Uber in the suburbs as an alternative to a taxi.
"I've been in situations, especially on holidays like Halloween and New Year's, where we know that driving is a terrible idea, and none of us want to be the one to stay sober the whole night," she said.
Meanwhile, Uber continues to battle a lawsuit from Chicago's major taxi operators, who contend the startup is violating the city's taxicab and livery service regulations. Last month, Uber announced it would start charging a $1.25 booking fee for its Chicago cab service.
"Uber is behaving like a rogue app and continues to shift additional fees directly to consumers," Norma Reyes, senior executive vice president of Taxi Affiliation Services, said in a statement.
Most Popular Stories
- 15 Myths That Could Ruin Your Hispanic Ad Campaign
- Bitcoin Clones Lurch Onto Financial Scene
- General Motors Names Mary Barra as First Female CEO
- AIG to Create 230 Jobs in Charlotte
- Clinton to Keynote Annual Simmons Leadership Conference
- How Bitcoin and Other Cryptocurrencies Work
- Californians Want to Legalize Marijuana
- Pacific Trade Pact Delay Hinders U.S. Pivot to Asia
- Russia Says Nyet to Canada North Pole Claim
- Budget Deal Sets Off Grumbles in Both Houses