the taxi wars

UberX Is Now Cheaper Than Taking a Regular Taxi in New York

WASHINGTON, DC - JULY 16: (L-R) Hotel employee Tedros Birat opens the Uber Car door for Brendan Kownacki who uses the UBER car via a smartphone app to get around town rather than cabs in Washington, DC on July 16, 2012. He pays a little more than cabs but says it's worth it. It's automatically billed to his credit card, tip included, and the quality of the cars and drivers leaves no surprises for him or his clients. (Photo by Linda Davidson / The Washington Post)
Step right in, sir. Photo: Linda Davidson/Getty Images

For as long as anyone can remember, New York has been a taxi town. The image of the bright yellow cab (or more recently, the pistachio-green outer-borough taxi) has been intimately linked with the city’s image and self-conception, since long before the current wave of digital-age competitors cropped up.

That will change soon if Uber has its way. The car-hailing app is slashing its prices in New York City in an attempt to undercut the taxi market and win over taxi loyalists. Now, for the first time, rides on UberX — the low-end version of Uber — will cost less than those in a yellow cab.

Uber announced today that it is cutting UberX prices by 20 percent for “a limited time” in New York. These fares will undercut both the old UberX prices and the price of a traditional taxi — saving you $2, for example, on a trip from Grand Central to the Financial District. The company isn’t saying how long the new price regime will last, but similar trial periods have gone on for months in other cities. Here’s the new comparison chart provided by Uber:

Uber has been using its recent $1.2 billion round of funding to conduct these kinds of price wars all across the country — in San Francisco, for instance, it’s now 45 percent cheaper to take an UberX than a cab. The company’s goal is simple: Make the service as attractive to newcomers as possible while elbowing rivals like Lyft and Hailo out of the market.

That aggressive strategy will sit well with customers, who will get cheap, subsidized trips around town. Uber drivers may not be as happy, since their earnings are linked to how much passengers pay. (Uber claims that drivers make up for lower per-trip earnings by getting more trips per hour.) In some cities, Uber has been attempting to keep drivers happy by paying them the old rate even while charging passengers the new, lower rate — effectively taking a loss every time a passenger steps into an UberX vehicle.

That’s not happening in New York, according to Uber’s New York general manager Josh Mohrer, who said that city drivers will still make their 80 percent cut of the new, reduced fares. But it’s clear that Uber doesn’t just want to coexist with the yellow taxi market. With its billion-dollar war chest, it’s coming straight for every medallion owner in town.

UberX Cutting Prices by 20 Percent in New York