Uber, the on-demand, app-based car service that established operations in Detroit last March, has now launched its lower-priced offering, UberX, in the Motor City. UberX is based on more of a ride-share model than Uber’s black car service, which aims to make drivers feel as if they have their own personal chauffeur.
Riders summon UberX the same way—with a few taps on their smart phones—but the ride will be a little less luxurious. UberX partners with licensed for-hire drivers with non-luxury vehicles and “everyday people” giving riders a lift with their personal vehicles.
Mike White, the company’s manager of operations in Detroit, says Uber guarantees UberX riders will be picked up in a car that is clean, no more than 10 years old, and can seat four people comfortably. Not only does it give riders a more affordable way to get around, he says, but it also gives people who want to be drivers the opportunity to make extra money in their free time using existing assets. White also says an UberX ride is often cheaper than a taxi.
So far, Uber’s decision to offer its services in Detroit is going well, White says. “We saw a big opportunity, and we came in very confident that Detroit would work,” he notes, despite the challenging economics and crime rate in the city. “We looked at the layout of the metro area and we noticed some gaps that we thought we could fill. For one thing, there’s not a very viable public transportation system that people can rely on.”
White adds that another factor in Uber’s decision to operate in Detroit was that 1,000 residents had already downloaded the app prior to the company’s official launch here.
Uber’s coverage area extends as far as Detroit Metro Airport to the west, north to Birmingham, and east to Grosse Pointe. White says that right now, Uber’s service is pretty well balanced between downtown Detroit and the suburbs, but he hopes UberX will open the service to “many more riders.”
White also says there is no area of the city that is considered off-limits to Uber drivers. Every Uber transaction is done online—no cash changes hands—so there’s an added layer of safety because the company has some of the riders’ personal information.
“An Uber driver always has the option to accept or decline a ride request,” White says. “In general, though, the accept rate is over 90 percent.”
Despite raising a massive funding round from Google Ventures and other investors this year and being considered one of the darlings of Silicon Valley, Uber has been dogged by regulatory squabbles and lawsuits from drivers who accuse the company of skimming tips. One lawsuit has been filed in Boston, and another, which litigants hope will become a national class action suit, was filed in federal court in August.
In Detroit, White says drivers will be paid by the company during a promotional month of free rides in Detroit. After that, drivers are paid by the trip, minus the 20 percent commission they give to Uber.
Uber recently moved its Detroit operations to the Grand Circus building after it outgrew its initial location in the Madison Building a few blocks away. The local staff is still growing, White says, and the company is currently hiring a driver operations manager.
“With the way Detroit and its tech scene are growing, we’re really committed and want to be a part of the city’s growth,” he explains. “We think transportation is an integral part of that.”
