The idea for the ride-hailing company’s new trial to offer subsidized fares to commuters came not from Uber but from the small city of Summit, New Jersey, BuzzFeed News reports.
Reluctant to spend millions of dollars on a new downtown parking lot, the city council approached Uber with a more cost-effective solution to help make life easier for commuters heading into New York City.
The “virtual garage” pilot program, which launched on Monday, is set to last six months and involves 100 Summit residents. A ride between home and the train station costs $2 each way, equal to the $4 fee for a day’s parking. Summit, population 22,000, covers a relatively small area so the journeys should be relatively quick, enabling each Uber driver to make multiple runs.
City administrator Michael Rogers told BuzzFeed that freeing up even 100 parking spaces will be “pretty significant in our system.”
Rogers estimated that the scheme, if rolled out on a permanent basis, would cost the city around $167,000 annually. New parking facilities, on the other hand, could cost as much as $10 million, though locating available land downtown would present an additional challenge. The city administrator speculated that the scheme could even help take cars off the road as some families could be persuaded to do away with the second car that they use solely for getting to and from the station.
While helping Summit to deal with its parking problem, the deal also gives Uber an opportunity to grow its service outside of the city markets where it currently does the vast majority of business.
This isn’t the first time for Summit to partner with Uber for subsidized rides. At the end of last year the city offered local rides for a flat fee of $5 during the holiday season, while Evesham, also in New Jersey, went so far as to offer free rides during the same period in an effort to cut the number of drunk-driving incidents.
