New Jersey town is subsidizing Uber rides

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Commuters in a New York City suburb can now get free or discounted Uber rides.

The town of Summit, New Jersey said it will subsidize the cost of Uber trips to alleviate parking congestion near its train station. The move will save taxpayers $5 million across 20 years -- what it would cost to build a new parking lot, according to a press release.

The pilot program will involve about 100 residents and run for six months (it's now accepting applications to be a part of the test). If successful, it could expanded to more users.

"[The] program is the first of its kind in the United States to use ridesharing technology as a parking solution," Mayor Nora Radest said in the statement.

Related: New Yorkers can now schedule Uber pickups

Riders who have already paid for a parking permit ($4 daily) will not need to pay for an Uber trip to the station. For those who haven't purchased a pass, it will cost $2 a ride. Summit pays the actual fare or the difference.

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Uber is looking for new ways to work with cities on solving public transportation problems... while growing its business.

Although this is the first commuter ridesharing program related to parking, Uber is trying to work with local governments to solve other problems. For example, Uber -- as well as its competitor Lyft -- wants to partner with Miami-Dade County to use federal grants to subsidize rides to two train stations. It aims to increase the use of public transportation by getting people to transit hubs.

Uber has other similar initiatives under way in California and Florida, too. In those cases, cities and private real estate developers offer residents certain perks, such as credits toward Uber rides, to cut down on parking woes or lure potential renters.

Related: What it feels like to sit in a self-driving Uber

The city of Summit says "thousands" of residents already use Uber, and over a third of them hail rides during morning and evening commutes.

The new program limits subsidized trips to those within city limits or to and from the train station. Trips must also occur on weekdays from 5 a.m. to 9 p.m.

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