Uber CEO balks after a reporter tells him the cost of his 2.9-mile Uber ride: 'Oh my God. Wow.'

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Uber CEO Dara Khosrowshahi speaks at the The Economic Club of Washington in Washington D.C., U.S. June 11, 2019. REUTERS/Carlos Barria
Uber CEO Dara Khosrowshahi estimated a 3-mile ride would cost $20. It was actually more than twice that.Reuters
  • The price of an Uber ride can catch you off guard — even if you're the company's CEO.

  • Uber's Dara Khosrowshahi was surprised when he learned an interviewer paid $50 for a 2.95-mile ride.

  • Uber prices have surged in recent years because of inflation and a pandemic-era driver shortage.

Many people have experienced sticker shock at an Uber's price, and the company's own chief executive is no exception.

Wired's editor at large, Steven Levy, took a 2.95-mile Uber ride from downtown New York City to the West Side to meet Uber's CEO, Dara Khosrowshahi. When asked to estimate the cost of the ride, Khosrowshahi put it at "twenty bucks," Levy wrote. His estimate, as it turned out, was less than half the actual price of $51.69, including a tip for the driver.

"Oh my God. Wow," the CEO said upon learning the cost.

That wasn't the worst of it. Levy said that when he first tried to book an Uber to get to the interview, the price was $20 higher. Khosrowshahi chalked that up to surge pricing, though as Levy noted, "It's 10 am on a sunny weekday, and it's not like the president's in town."

"Everything is more expensive. Inflation has become a part of our everyday life," Khosrowshahi responded. "With Uber, the vast majority of your fare is going to your driver. Earnings per week for our drivers are up 40, 50 percent over the past four years, because that is the cost of time and the cost of labor. I think that's positive."

Data from Rakuten Intelligence indicated the cost of rides from ride-hailing apps like Uber and Lyft increased by 92% from 2018 to 2021, CNBC reported. Rakuten's data suggested Uber fares in April 2021 were up 40% year over year. Khosrowshahi vowed at the time that prices would return "to nearly the good old days" by September.

Still, earlier this year, the UCLA Labor Center found that from February 2019 to April 2022, the median passenger fare for Uber and Lyft in New York City increased by 50%, while median driver pay increased by only 31%.

Khosrowshahi has previously attributed some of the recent growth to inflation and a shortage of drivers.

But last August, the company reported reaching a record 5 million drivers worldwide, up 31% from the year prior.

"We have a very strong flow of new drivers who are signing up, coming on to earn," Khosrowshahi said at the time. "Over 70% of them have said that inflation and what they're seeing right now in terms of the cost of groceries, the cost of living, plays a part in that decision for them to come on to the platform."

Some of the price increases are also attributable to the fact that Uber is no longer subsidizing rides on a quest for growth and is instead focusing on profit. It seems to be working: This week, Khosrowshahi announced Uber's first operating profit.

Correction: August 1, 2023 — An earlier version of this story misstated the price of the Uber in the article's summary bullets. It was $50, not $20.

Read the original article on Business Insider