Uber slashes prices in 48 cities to brighten the winter blues

13 Jan 2015 | Author: | No comments yet »

These 48 Cities Are Getting Cheaper Uber Rides.

Uber wants to get you out of hibernation and back on the streets. The ridesharing service claims to be providing the cuts while still maintaining driver wages, meaning that the reductions will cut right into its margins.

Uber said the seasonal prices cuts are happening in Cleveland, Miami, Orlando, San Diego, Denver, Atlanta, Salt Lake City, Dallas, Detroit, Baltimore, Milwaukee, Minneapolis, Albuquerque and Oklahoma City, among others. “More demand turns into significantly more efficiency for the driver, more trips for every hour, and more earnings for every hour on the road,” said Uber via blog post. In some markets battling its rivals necessitates aggressive price cuts, while in others offering price reduction is a way to appeal to more consumers and widen awareness of its service. Uber said that in Chicago, which it described as “the cheapest of all Uber’s U.S. cities,” fares are 23% less and drivers are making 12% more in fares per hour. Uber is restricting the price cuts to cities where the service most recently rolled out, though the company didn’t say whether the price cuts will also extend to so-called “surge pricing” when the cost of an Uber ride goes up during peak demand.

With that in mind, the company has announced plans to cut prices in 48 of its “newer” cities in U.S. that have no experienced cheaper rides as yet. Uber writes in a blog post today that its largest cities have already seen price cuts in the last year, so now it’s time for those more recent additions to get a discount. After all, if drivers can earn more in Chicago, Uber’s cheapest city, than it should work everywhere, Uber explains. “In the past, Uber has implemented price cuts without a guarantee for drivers,” Uber wrote on its blog. “However, this time around, we’re trying a new approach. The company argues that price cuts during the winter slump tend to mean that drivers will earn more than they would have otherwise—the rationale being that price cuts means more rides per hour, which increases earnings. New York, where it previously claimed driver take-home has increased despite price drops over the past three years, and Chicago, where it said the average price of fares has dipped but an increase in passengers is bringing more money to drivers overall.

Uber is present in more than 140 cities in North America (and cities in 53 countries worldwide, for what it’s worth) so it makes sense that it is tightening the screw by cutting prices to widen its appeal in these newer cities. The company’s manifesto — ignoring, for a moment, many of the important concerns about the its recent behavior and culture — is to move people and change the world, as it often says in job vacancy descriptions.

Drivers must accept at least 90% of their trips, average at least 1 trip per hour, and be online for 50 minutes of every hour worked, an Uber spokesperson told Venture Beat. During the 2014 price cut, Uber also helped drivers out by lowering the company’s commission on each fare, The Wall Street Journal reported last January.

On Uberpeople.net, a forum for Uber drivers, a driver has done the math in Nashville, one of the cities getting reduced fares, and concluded that the guarantee isn’t the good deal that is sounds. Uber has been criticized in recent months for its claims that Uber drivers make a good wage with several reports saying the reality doesn’t live up to the hype.

The $12.80/hour is the most you can earn and that is if by some miracle you accept a ride and that passenger is already at your location and then chooses not to go anywhere, so that you have no costs from moving your car.

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