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Monday, July 15, 2013

Uber, Maker of Summon-A-Car App, Adds Fare Splitting

Uber, the San Francisco start-up that gained something of a cult following by helping people summon a luxury sedan with a smartphone app, is trying something new for people who ride with friends. It said on Monday that it would add the ability to split fares between multiple passengers with a few button taps.

The fare-splitting feature will become available when iPhone and Android users download a software update. To split a fare, a user requests a ride and then taps an arrow next to the driver’s information. An option labeled “Split fare” will show up, and the user can select friends from his or her address book.

The friends then receive a text message from Uber with a link to tap on. Those who are registered with Uber will be directed to the app, and those who are not will be asked to downloaded the app, sign up for an account and enter their credit card information. The app will take care of the payment at the end of the trip.

The fare-splitting feature is not just a method for friends to encourage others to sign up for Uber; it is also a way for the start-up to defend itself against the onslaught of car-summoning apps being released for smartphones. Sidecar and Lyft, two apps that are becoming popular, summon cars driven by ordinary citizens in exchange for “suggested donations” that are cheaper than the luxury sedans that work with Uber. (Drivers for Lyft make them easily identifiable in San Francisco by mounting a hot pink mustache on their bumpers.)

To compete more aggressively on price, Uber recently started operating in yellow cabs in some cities, including San Francisco and New York. And it offers UberX, a feature that allows people to summon private car services that use hybrid cars or livery vehicles that are cheaper than luxury sedans. UberX also allows people to summon community drivers, similar to Lyft and Sidecar, in cities where it is allowed.

Now fare-splitting can also help lower costs for passengers, said Travis Kalanick, chief executive of Uber. “With UberX as cheap as it is, there are some trips, split over four people, which can be cheaper than the bus,” he said.