Uber and chief rival Lyft continue their game of chess in an effort to increase their share of the rideshare market. Earlier this month, Lyft issued price cuts in 33 markets, an initiative that didn’t include New York and Chicago. Now, Uber has stepped up to increase demand for rides in NYC with a significant price cut.
As of 7am today (January 29), Uber is slashing the price of UberX and XL fares by 15%. The initiative will reduce the UberX base fare from $3 to $2.55, with the $8 minimum fare on a trip now falling to just $7. Meanwhile, the per-minute rate will go from 40 cents to 35 cents, and the $2.15 per mile rate will be cut down to $1.75. UberXL will also receive a similar 15% price drop.
While NYC riders will undoubtedly welcome the price cuts, Uber drivers won’t be thrilled about making less money per fare. Uber believes however, that lowering the price of UberX and XL rides will increase the number of customers and ultimately help drivers make up the difference in earnings. Uber’s strategy is backed up by more than just a theory. The company claims that idle time for its drivers fell by 42% following a price cut in July 2014.[NY Daily News]
Photo Credit: Spencer Platt/Getty Images