Uber Launches Lower-Priced UberX Service in Detroit

11/5/13Follow @XconomyDET

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.”

Sarah Schmid is the editor of Xconomy Detroit. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET

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  • Dave Sutton

    UberX is dangerous for passengers AND drivers. If drivers cause an
    accident, neither they nor their passenger will be covered by the driver’s regular insurance. The reason is because operating a private vehicle in a commercial manner is outside the scope of standard insurance coverage.

    Uber claims to possess its own significant insurance policy. Fans repeat this claim as if it were fact. HOWEVER, UBER HAS NEVER ALLOWED ANYONE—IN ANY OFFICIAL CAPACITY—TO REVIEW THE TERMS OF ITS INSURANCE POLICY.

    So, if an UberX driver causes a crash, his insurance will refuse to cover the accident and Uber could refuse to cover it as well. Remember: Simply by
    downloading the Uber app, passengers have agreed to hold the company harmless for ANYTHING that happens on the ride.

    • James Henry

      Uber gover ONE MILLION Dollars in Supplementary Insurance for Every Trip. Ubers #1 priority is safety. The above commenter is probably some one from a limo company who is pissed that his company is loosing all its business to uber. Uber lets the drivers who work hard on the streets every day (all ready licensed) earn a little extra money filling in their free time between scheduled jobs. The only people who are against uber are the as*hole greedy limo company owners who are just jealous cuse the did not come up with the idea on their own.

      DAVE- stop posting about information you have not clue about.

      Regards, James

      ** P.S. I am not connected with uber in anyway and just don’t think someone should lie to other people reading this comment.
      The only affiliation I have with uber is that I have used it a few times and love the service.

      • Guest

        Are you a lawyer? You’re posting ‘information’ which you provide no facts, no evidence, nothing except your personal animosity towards limo companies. Did you use to drive a limo?

        • James Henry

          If you go on uber’s driver website, you can see that they offer $1 million in supplementary issuance.

          • brothenberg

            Travis claims its drop down.. but driver support clearly states any accidents must be deal with by the driver. Nobody will ever use that $1mm policy.. and many think Lyft’s policy isn’t a true policy and is a wrapped $1mm bond with legal mumbo jumbo from their crazy legal witch.

      • MarcyHayes

        JAMES! Since you’re so sure about UBER’s insurance policy – please tell us HOW YOU KNOW THIS? If you have NO affiliation, and since on UBER’s very own website it states that riders and drivers ARE NOT covered by UBER … PLEASE – SHOW US!

        • brothenberg

          I have plenty of knowledge.. and can easily post proof from at least three insurance companies they do not support driving your personal vehicle for “donations” or “fares”. It should be clearly obvious to ANYONE using your personal car for a taxi, is against your personal auto insurance and new car warranty, AAA will also now be charging “ridesharing” cars $160+ for a commercial tow. Lyft will not tell anyone their carrier.. Uber actually has a $2mm policy, $1mm more than lyft/sidecar. But it’s liability only and the fact is if your personal insurance isn’t valid, the umbrella policy uber/lyft provide isn’t really drop down and your still screwed. I could get away with 80% of my passengers saying they are “my friend”.. but not all of them.. still risky and the rides are uninsured till insurance companies create a citizen taxi insurance.. the companies are just matching apps and put the insurance onto the drivers, to get insurance that well doesn’t quite exist yet. Once Lyft/Uber/Sidecar apply for their TNC/PSG permits, they will be required to give all drivers a copy of this commercial policy finally.. then I expect to see tons of clones..

          • Chris

            @brothenberg:disqus Thanks very much for providing all the info. I did all the application work to become a driver for Uberx but am now going to hold off until either Uber insurers the drivers or there is some type of policy that Uberx drivers can purchase.

        • brothenberg

          From another article.. “Bad news on the insurance front.

          Amica is a great insurance company and I don’t want to risk not being renewed. I’m OUT as a #Lyft driver.

          Here is the note I received today from Amica customer service:

          Dear Mr. Frey,

          This will confirm our recent conversation. It is our understanding your request pertains to transporting individuals for a donation. We also understand the transport will involve your personal vehicle(s) currently insured under policy number xxxxxxx.

          After reviewing your request, we are unable to offer coverage for that activity. Amica is a personal insurance carrier which does not offer coverage for livery services.

          Should this activity take place this could impact the renewal of your policy. We strongly recommend you seek a local agent that specializes in livery services.

          If you have any further questions, please contact our office at 800-592-6422. We are available 24/7 to assist you.”

        • brothenberg
        • brothenberg
        • brothenberg
        • brothenberg
  • MarcyHayes

    Just went to the website – it states that the Transportation Provider – not UBER or any of its associates – are responsible for any damages … there is not one word about any sort of insurance in the case of accident, so @James, you are incorrect in your assumption that a rider is insured against accident.

  • Richard

    UberX is illegal. The Drivers are NOT covered by their own insurance. Uber may indeed have an umbrella insurance policy, but that is liability insurance. If a driver gets in an accident they are responsible. Uber is not being forthright about this and is using innocent people to pad their numbers.
    I have asked lawyers, police officers and the state of Michigan regulatory affairs, guess what, every one of them said that is absolutely ILLEGAL. I have talked to insurance agents as well and they have absolutely stated that a driver will NOT be covered if the vehicle is being used for commercial purposes. I don’t think uberX drivers quite understand the risks they are taking for a $5 dollar ride.
    Just wait till someone gets arrested too, that’ll be fun.

  • pagol

    uber black is safe uber X danger the driver have no chauffeur license car didn’t inspected and a regular insurances so i think uber X is not a safe ride but black is ok .