Business

Uber begins undercutting taxis in New York with 20% price drop

Updated 12 p.m. with comment from Uber confirming that drivers are now paid less per ride in New York.

Uber today announced that it is “now cheaper than an NYC taxi,” after lowering fares in New York by 20 percent.

As we wrote last week, Uber is no stranger to price cuts and hikes. In April, it raised the price of its mid-level service in New York, and in June it lowered prices in LA. Most recently, Uber cut the price of its UberRush bike courier service in New York. Now UberX, Uber’s low-end car service, is marginally cheaper than New York cabs, as detailed in the graphics below:

Screen Shot 2014-07-07 at 4.50.35 PM

Uber states that the current prices are “only in effect for a limited time.” This warning somewhat alludes to the common monopolistic strategy of dropping prices and raising them back up after achieving market control – a strategy recently suspected of Amazon.

“The more you ride, the more likely we can keep them this low,” Uber says. In a statement to VentureBeat, Uber confirmed that New York drivers will make less per ride they provide: “NYC drivers will continue to earn up to 80% of the lower fare,” the company said.

More about the companies and people from this article:

Uber Technologies Inc is known as Everyone's Private Driver. Uber operates an on-demand car service used all over the world. With the touch of a button from your phone, you can experience your own private driver. Sign-up quickly, g... read more »

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37 comments
Darrell Boyd
Darrell Boyd

Not every cloud has a silver lining. Ask an Uber driver what happens if there's an accident. For that matter, ask Uber about your recourse if you are hurt in an accident. Driver is not "really" insured, and you might not be covered either.

Yannick Boucher
Yannick Boucher

What Tyler said. Uber apologists are a seriously in-denial bunch. Also, VB, stop saying EVERYTHING is 'HUGE'. It isn't. Uber will die Aereo style (with legislation catching up) and it'll be so sweet to see that arrogant stance be wiped right off. Now can we move to other companies? Oh also, guess that original price WAS a ridiculous ripoff eh?

Eric Wittke
Eric Wittke

Not a race to the bottom with the price multipliers - now it's a more real-time reflection of current demand

Ann Marie Hake Hughes
Ann Marie Hake Hughes

Also they aren't required to go to the outer boroughs, they are free to discriminate, unless yellow cabs that have to pick up anyone, and go anywhere in NYC.

Adolfo Foronda
Adolfo Foronda

just wait till the autonomous cars/trucks are a go.

Brant Emery
Brant Emery

It's true, savings come from somewhere. Nothing is free people. This isn't sustainable, it is obviously a loss leader tactic. Ethical, debatable. Legal, yes.

Greg Staley
Greg Staley

can we buy shares of Uber ? what is success if it feeds on other's destruction ?

Wonhee Lee
Wonhee Lee

Daeki Lee ooh nice. thanks i needed it

Tuomas Starwalker Santakallio
Tuomas Starwalker Santakallio

Well, one CAN hitch a ride, but there ought to be a Bitcoin carpool too. You know, for those who don't use American creditcards.

Alex Soejarto
Alex Soejarto

Free markets relay on regulation and upholding property rights. No such thing as a free ride. lol

Will Pio
Will Pio

In Seattle they did a 20% drop in price for the summer and decided to still pay the drivers full price for the fare.

Tranh Nguyen
Tranh Nguyen

It's a race to the bottom, with ALL drivers make less money, similar to Wal-mart's discount, but without economy of scale. Wal-mart employees make peanuts, remember.

Harrison Weber
Harrison Weber

Alfredo Luque Yes, that's what Uber says. That may be true, but for any drivers already maxing out on the number of rides they can handle per day, it should yield less income.

Harrison Weber
Harrison Weber

UPDATE: Uber says drivers now make less per ride thanks to the 20% price cut

Tyler Dylan Brown
Tyler Dylan Brown

how many taxes are they going to avoid? How many giant gaping insurance liability holes are left?

Sal Giovanni
Sal Giovanni

This has to be stop until they follow the rules,laws and regulations...www.stopuber.com

Bilal Jaffery
Bilal Jaffery

And Uber rates are also dependent upon time/traffic. 

Shawlin Kawasaki
Shawlin Kawasaki

Looks like someone is facing other entrepreneurs. Due to their industry, Info sharing, its all risky!

Lucas Laramie
Lucas Laramie

Limited insurance, no rules, no regulations, no commercial plates, registrations, bypassing State & local laws . Now you know why they are cheap . Put them on the same level as all commercial drivers and I'll have no problem but they need to comply like everyone else first .

Lucas Laramie
Lucas Laramie

Yep, go get them as in avoiding insurance, regulations and laws as they don't apply to them .