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Uber Cuts Fares in 48 Cities, Raising Some Concern Among Drivers

Uber Cuts Fares in 48 Cities, Raising Some Concern Among Drivers

By Mike Isaac, The New York Times | Updated: 10 January 2015 16:10 IST

In Denver, Uber has said that its drivers will see guaranteed minimum fares of $12 to $24 per hour, depending on demand.

Uber, the popular ride-hailing start-up, has enticed millions of new customers with a simple promise: The experience will be better and cheaper than taking a taxi.

The cheaper part may be especially true after Uber's announcement late Thursday, when the company said it would cut rider fares across 48 cities in the United States.

Uber said the fare cuts would help drivers "beat the winter slump" by generating business in the months after the busy holiday season. The cuts will largely affect markets in which the company has a relatively small presence, like in Nashville or Milwaukee.

Uber, which allows users to summon a private car with a few taps of a smartphone app, has reduced driver fares in the past. It often cites the same argument: The lower the cost of its service, the more people will use it. And the more people use it, the more money drivers will make.

To reassure drivers worried about lower fares, Uber said it would guarantee a minimum fare per hour for drivers in these cities.

"We expect that these seasonal price cuts will help bring newer Uber markets in line with our larger ones with lower costs for riders, higher earnings for drivers, shorter wait times for both and a better experience for all," the company said in a blog post. Fares vary on a city-by-city basis.

But on a popular message board among Uber drivers, commenters expressed doubts that Uber's guarantees would offset the heavy price cuts.

In a post on the site, UberPeople.net, one person, for example, pointed out that demand for the service could only increase to a certain point to compensate for Uber's discounts.

"[Uber's] blog post is hysterical," wrote the person, whose user name is anOzzieUber. "Why not drop the fares by 95 percent, then we could all expect about 50 rides per hour?"

"Time and again we've seen that with price cuts, drivers earn the same or more per hour because more people turn to Uber for an affordable, reliable ride whenever it makes life more convenient," said Lane Kasselman, an Uber spokesman.

In Uber's blog post, the company described the cuts as "seasonal," though did not specify how long they would last.

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