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UberX Is Now Cheaper Than an NYC Taxi

The black car service is using scorched earth tactics to convert New Yorkers to their app.
(Photo via Sam Chills)

(Photo via Sam Chills)

The war between Uber and the cab drivers of New York City has been ugly, but now Uber’s running a risky new play to undercut yellow cabs and convert more New Yorkers to their services.

Uber is cutting 20 percent off all UberX rides for a limited time, which by Forbes’ estimate means that Uber is losing money on these rides. It’s scorched earth tactics: starving out the competition by taking a major loss.

By Uber’s measure, the fare cuts should be just enough to bring most rides from being a few dollars more than the price of a cab to just barely less.

Uber's blog has a series of colorful graphics that show how the new fares are barely enough to make Uber cheaper than yellow cabs. (Image via Uber)

Uber’s blog has a series of colorful graphics that show how the new fares are barely low enough to make Uber cheaper than yellow cabs. (Image via Uber)

But what that does that mean for Uber drivers, who likely didn’t  have a vote in the price cut decision?

“What we’ve seen in cities across the county is that lower fares mean greater demand, lower pickup times and more trips per hour — increasing earning potential and creating better economics for drivers,” Uber said in their blog post this morning.

Another way of putting it is: we don’t know if they’ll be paid less, but they definitely get to work more, which should pay off “in the long run,” as Uber puts it. That’s easy to say for a company that keeps collecting checks while its drivers have to hustle harder to make the same money.

But hey, whatever it takes to convert new customers, right?

 

Follow Jack Smith IV on Twitter or via RSS. jsmith@observer.com