War is hail — and Uber has just launched a new offensive against yellow cabs in New York.
The deep-pocketed taxi-hailing app has temporarily slashed prices for its UberX service about 20% in New York City, undercutting the cost of a yellow cab ride for the first time.
“UberX is now cheaper than an NYC taxi,” Uber proclaimed on its website on Monday.
“From Brooklyn to the Bronx, and everywhere in between, UberX is now the most affordable ride in the city.”
The move — an aggressive bid to capture an even bigger share of the city’s taxi riders — is a slap in the face to taxi drivers, whose prices are regulated.
“Uber is taking over,” cabbie Ricardo Lopez, 60, a Staten Island resident, said after hearing the news about the Uber price cuts. “Uber is our biggest competition. They are making all the money for themselves.”
“This is the type of competition that yellow taxis and green borough taxis cannot fairly compete with,” David King, an assistant professor of urban planning at Columbia University, told the Daily News.
Cab drivers in Europe have protested previously against Uber, claiming it has an unfair advantage.
The New York price cuts on UberX — Uber’s lower-end service — mean a trip from Williamsburg, Brooklyn, to the East Village will now cost $15 versus $16 for a yellow cab, according to the company’s website. Under the old pricing, that ride would have cost $19.
A ride from Grand Central to the Financial District now costs $22 with UberX, $2 less than a yellow cab ride and $6 less than the old Uber.
Bhairavi Desai, executive director of the New York Taxi Workers Alliance, the union representing the city’s taxi drivers, said she wasn’t too concerned about the price cuts.
“I think it’s a lot of hype,” Desai told The News. “It’s just a marketing ploy. It’s only a $1 to $2 difference for a limited amount of time.”
Desai added that Uber “needed to cut prices” because its surge pricing — in which Uber jacks up prices during peak periods — has angered customers. “They have been engaging in price gouging for months,” Desai said.
Josh Mohrer, Uber’s general manager, fired back in a statement: “It’s ironic that the taxi driver union is complaining about a pricing mechanism that offers more incentives for drivers and ensures more reliability for consumers. Uber welcomes any taxi driver who wants to experience the flexibility and economic opportunity that the Uber platform offers.”
Uber, which has pursued price cuts in other cities, has plenty of cash to fuel a market-share battle. The company recently raised $1.2 billion, putting its valuation at $17 billion.
Uber said the lower New York prices will be in effect for only “a limited time” — but did not say how long that will be. “The more you ride, the more likely we will keep them low!” the company said.
The cheaper rates mean drivers affiliated with Uber will earn less per ride. But Uber said it expects drivers to ultimately benefit because it anticipates the cuts will generate more demand and more trips per hour.
With Victoria Johnson
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