Uber Car Service to Lower Fares in Some US Cities for Winter 2015: New York, Los Angeles and Chicago Don't See Discount
Car service company Uber is giving its customers a belated Christmas present as it lowers prices in 48 U.S. cities. The move is aimed at boosting sales in the cold winter months.
"We're always looking for ways to deliver lower prices to riders to make Uber an everyday transportation option," the company wrote in its blog. "The upside for the rider is obvious, but also important is that with the increased demand, drivers' income goes up."
The cuts are limited to 48 of Uber's newest cities, including Atlanta, Detroit, Miami and San Diego. Riders in New York, Chicago and Los Angeles, for example, will not receive the benefit, nor will those using the service outside the United States; some of these markets have already seen important cuts in the past, however.
According to Vox, Uber's new prices "could cause consternation among drivers worried that their already modest incomes will take a hit," but Uber said it would offer drivers a minimum-earnings guarantee because it is confident the expected increase in demand will pay off for everyone.
Just how much rates will be cut, meanwhile, remains unclear, Time reports, but Uber points to its price-slicing efforts in Chicago as an example of how the measure might work.
In December 2014, riders in the Windy City paid an average fare that was $11, or 23 percent, less than what they had handed over a year earlier. Nevertheless, the average number of rides per hour was up 45 percent, which translated in average hourly bookings rising from $19.10 to $21.34.
Customers are "very sensitive to price," Andrew Macdonald, Uber's regional manager for the central part of the United States, said .
"The lower you bring the price, the better the economic case for riders to leave their car at home," Macdonald said. "In some cities, you may see driver productivity jump so quickly that in four weeks, they're already doing 30 percent more trips per hour."
As of December, Uber was available in 53 countries and more than 200 cities worldwide. The start-up is valued at more than $40 billion, according to the Wall Street Journal.
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