I personally would struggle to call them “better”, although it is worth discussing the differences in submarine design and components between the various Entente/Allied powers and the Central Powers. While they all utilized submarines, there was some variability in the general design of the U-Boats and the components used to create them.
Hull Design
Hulls for submarines in the era were built with two different methods. There were “single hulled” submarines, and “double hulled” submarines. A “Single Hull” is exactly that, there is only one hull between the crew and the water. These submarines tended to perform better underwater while having worse performance on the surface than their double-hulled contemporaries. A double hull submarine incorporated an outer hull and an inner pressure hull. The outer hull was not watertight, and thus able to be designed more like a traditional ship. The pressure hull was the one designed to withstand the outside water pressure while maintaining normal atmospheric pressure inside. These designs also allowed submarines to attain a higher speed while on the surface, although their submerged speed did suffer slightly. This illustration from Commander Yates Stirling Jr. gives a good cross-section comparison of the two styles. Nations on both sides utilized submarines of both the single-hull and double-hull variety. So in terms of basic hull design, the Germans were not all that better than other nations, they were the same as their contemporaries having a mixture of single-hulled and double-hulled submarines.
Propulsion
This is where differences between German and Allied submarines do start to diverge, at least a little bit. By 1914, the primary method of submarine propulsion was the diesel-electric system. While on the surface, a set of diesel engines would propel the boat and charge it’s electric batteries. When submerged, using the diesel engines would create a hazardous environment for the crew as CO2 is produced and not able to be cycled out. When submerged the submarine would switch over to its batteries and electric motors which drove the propellors and systems. The Diesel Engine was invented in Germany, and German-built diesel engines were generally better than American or British built engines. That does not mean they were perfect. German crews encountered breakdowns frequently, although these breakdowns were less frequent than Diesel engines built on different designs in other countries. In the United States’ Submarine Force there were two major submarine manufacturers: Lake Torpedo Boat Company and Electric Boat. Lake had secured a contract prior to the war that allowed them to build Busch-Sulzer diesel engines, while Electric Boat had to make do with their own designs. A common complaint within the US Navy was that the EB designed engines did not perform as well and broke down more often than their Lake counterparts.
There were some submarines at the start of the war that was still driven by petrol. These were even more dangerous and could lead to explosions or fire on-board. These submarines tended to be smaller than their diesel-electric cousins, and as the war went on were marginalized within the various navies.
I will stress again however that these differences were fairly marginal. German submarines were only a bit less prone to breaking down than their Allied counterparts.
The Germans were less likely to experiment with other propulsion methods than other countries. The British famously attempted to create a “fleet submarine” (a submarine capable of operating alongside a surface fleet) with the K class. The K class was driven by a Steam Engine while on the surface, and electric batteries while submerged. The vessels were very long and as such did not handle well and many were lost in an accident.
The concept of using steam to propel submarines was not new, Thomas Nordenfelt famously designed steam-powered submarines in the 1880s that he sold to the Greeks and Ottomans. However, in actual wartime conditions, they were dangerous, especially when the diesel-electric system had proven itself to be the best method of propelling and powering a submarine in the era. The British were not the only country to have steam-powered submarines, the French, for example, had steam-powered boats in the form of Archimède. On a patrol in the North Sea, * Archimède*’s funnel was damaged and the submarine could not submerge during a storm. The driving rain made its way down the damaged funnel and almost caused an explosion by coming in contact with the batteries. Steam-powered submarines were extremely dangerous and essentially experimental. In this way, the German submarines were better as they did not experiment by trying potentially unreliable forms of power for a submarine.
Conditions
If the technology is all the same, what about conditions on board? Safe to say it was equally as awful. When submerged these early submarines were prone to feel a “pumping” from the water column, meaning that a vessel was always subject to motion. Sailors would be seasick, and the fumes from diesel, tobacco smoke, sweat, food, garbage, and bodily waste all melded together to create a putrid odor that would help make even the most veteran sailor sick. On top of all that, there would be water everywhere as condensation would form on the inside of the hull and drip everywhere. If you wanted to sleep, you’d have to find a nice spot or string up a hammock. Bunks were not yet introduced to submarines and space was at a premium. American submarines that had a crew compliment of twenty often had thirty to thirty-five men onboard. If you wanted to go to the bathroom while submerged you may not have been able to use the head (toilet) as it could not be pumped (to flush) below 30ft. The British and Americans used a bucket half filled with fuel oil in those cases.
Patrols would be long and dull. Many days the Germans might not encounter an Allied merchant ship, or the Allies might not encounter a German naval vessel or submarines. All that surrounded the boat was ocean. The submarines were but a small speck in a much larger maritime world. There was no difference in this regard between the two sides.
Strategy
The real difference between the submarines of the Allies and the submarines of the Central Powers lies in how they were used.
The Allies pioneered “hunter-killer” (an achronistic term but it perfectly describes the role) submarines in World War One by attempting to use their submarines in the North Sea, Caribbean, Mediterranean, Adriatic, Western Atlantic, and in the waters around the Azores Islands, to hunt and sink German U-Boats. This is why the Fessenden Oscillator, while not effective, was important. It allowed the Allies to try and acoustically locate German submarines while they were submerged as that was one of their primary goals. Allied submarines sunk 10% of the total amount of U-Boats sunk in the war. While not a majority of the sinkings, they did contribute a significant amount to the war effort.
The Allies also conducted a limited, Prize Rules regulated anti-shipping campaign in the Baltic Sea against the Germans and in the Sea of Marmara against the Ottomans. In both of these theatres, the Allies often stopped a vessel, boarded it, and searched it for contraband. In the Sea of Marmara, this campaign almost completely deprived Istanbul of critical supplies during the fighting at Gallipoli. In the Baltic Sea, Central Power’s shipping altered their routes to stay within neutral waters as long as possible and also started convoying, at least for certain cargoes. The Allied Anti-Shipping campaigns were fairly successful.
Another important role of Allied submarines was that of reconnaissance. In the North Sea the British used them in that role for the entirety of the war as they were able to operate fairly close to Germany and German held land, and could potentially track the High Seas Fleet if it sallied out. They were also intended to be used as ambushing units if the High Seas Fleet sortied out for a battle, but they were less effective in that regard.
Compare this to the Germans who primarily used their submarines in two different “unrestricted” shipping campaigns where they attacked any merchant vessel without warning. This campaign was effective but came with it costs: costs in manpower, and costs in how other nations perceived Germany. The Unrestricted Campaign of 1917 was one of the major reasons for the United States joining the war. Brazil joined the war in part due to some of its ships being sunk as well. The Germans leveraged the strengths of submarines in 1914-18 by using them to ambush generally unarmed vessels. The Allies did not ambush Central Powers merchant traffic in nearly the same way, relying primarily on a surface blockade.
So in short, the U-Boats did not differ dramatically from the submarines of the Allies. Rather, the primary differences lie in how they were used.