Uber, the mobile app car service company, announced Wednesday it is launching its uberX taxi-like service in sprawling Silicon Valley, a region notorious for long commutes, corporate shuttle buses and grinding traffic jams.
The new service is expected to appeal to legions of tech workers who work odd hours as well as to Peninsula and South Bay residents seeking alternatives to traditional taxis. An uberX trip from San Francisco International Airport to Palo Alto is $60.
"I lived in Palo Alto and can vouch for the fact that the South Bay has some of the most expensive and least reliable taxis in the country," said Ilya Abyzov, Uber's general manager in San Francisco. "The launch of uberX here finally gives South Bay residents an option that's better, faster and cheaper than a taxi."
Since its founding in 2010, San Francisco-based Uber has exploded in the United States as well as internationally and now operates in 37 cities from Amsterdam to Seattle. Uber has faced regulatory scrutiny and uncertainty as it has taken on the traditional taxi industry but is growing at a rate that has investors swooning.
The company offers vehicle options at various prices. UberBlack, the default option, is a high-end sedan. UberSUV seats up to 6 people. UberX offers "the convenience of Uber at a lower price," with midrange cars like the Toyota Prius.
Uber made a name for itself by deploying commercially licensed drivers in sleek black towncars to customers wielding smartphones. But Uber now has competition from other startups like Lyft and Sidecar, where drivers use their own cars to provide rides.
This spring, state regulators with the California Public Utilities Commission gave Uber the green light to partner with drivers not specifically licensed to drive taxis or limousines, and the uberX option was born.
UberX prices have typically been 10 percent less than a taxi; a trip from San Francisco to SFO is $50. UberX drivers use mostly a mix of hybrid and midrange cars, and the cars are owned by the drivers, who pay uberX a percentage of the fees they collect.
Uber planned to celebrate its expansion into the South Bay with a happy hour Wednesday evening at the Vintage Wine Bar at San Jose's Santana Row. "Snag some Uber swag while you mingle with fellow riders and the Uber team" reads the invitation.
Uber has become the transportation darling of the hot "sharing economy." In December 2011, the company raised $32 million in a second round of funding lead by Menlo Ventures, Amazon's Jeff Bezos and Goldman Sachs. The company is speaking to investors, and rumors are rampant that the round of financing will be massive and oversubscribed.
Travis Kalanick, Uber's CEO and co-founder, spoke at the Brainstorm Tech conference in Aspen, Colo., this week. Fortune's Jessi Hampel asked Kalanick if the company's valuation was higher than Airbnb's $2.5 billion; Kalanick artfully dodged the question.
"So the party line is that we are not commenting on fundraising discussions we may or may not be having," Kalanick said.
Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.
SFO to Palo Alto: $60
San Francisco to Palo Alto: $90
Palo Alto to Mountain View: $25
Sunnyvale to San Jose: $35