Uber (UBER), the popular ride-hailing app, implemented a rate cut today for its Uber X and Uber XL services. Minimum fares will drop from $8 to $7, per-mile rates will go from $2.15 to $1.75 and per-minute rates will drop to 35 cents from 40. The changes were first reported by the New York Post.
The reduced prices were rolled out in 100 cities around the United States and Canada, marking the third straight year of price cuts. Uber’s new fares are standardized in each city. The move follows a similar action by Uber’s highest-profile competitor, Lyft, which cut its fares in 33 cities (though not New York) earlier this month.
One theory is that Uber is effectively being forced to lower fares as a response to stagnating demand. In recent months the app has faced a push for greater regulation of its industry, along with stiff competition from Lyft and the existing taxi services in the city.
The rate cuts are actually being protested by New York taxi drivers, who have been unhappy with what they see as Uber’s intent to monopolize the personal transportation industry at the expense of drivers. In order to compete with the new players, yellow cabs have released their own ride-hailing apps—but cab drivers are limited in their ability to lower fares, which are set by the city’s Taxi and Limousine Commission.
Some Uber drivers have already complained that fare cuts have led to them being paid less than minimum wage—these struggling drivers have boycotted the service in response. Uber, however, claims that the new prices announced today will cut down on the time that drivers spend waiting for passengers, raising drivers’ overall earnings.
