7/10/2014

Uber Cuts Prices 20% in New York City

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Ride-sharing service Uber Technologies Inc. has cut rates 20% in New York City in an effort to undercut the pricing of the city's traditional taxi providers.

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Ride-sharing service Uber Technologies Inc. has cut rates 20% in New York City in an effort to undercut the pricing of the city's traditional taxi providers.

Uber says the temporary discount for its UberX service, in which customers use smartphones to arrange a ride, makes its on-demand cars cheaper than calling a cab.

The company says it will continue the rate plan if it proves successful.

The San Francisco-based company is experimenting with pricing during the summer when demand is lower. Uber, which employs freelance drivers, gives them 80% of ride revenue. Lower fares mean lower per-trip earnings, but the company predicts cheaper rates will generate more than enough additional business to offset the difference.

Traditional taxis charge fixed rates. Uber's rates vary sharply, sometimes doubling when demand is high and plunging 50% when it isn't.