Uber announced on Friday morning that it has reduced Uber X fares by 15% citywide, meaning that an Uber from Midtown to LGA will now cost $37.12 on average, compared to $43.67 under the old pricing scale.
According to the company, which was recently valued at $62.5 billion, the motivation for the fare reduction is to decrease idling time for drivers who tend to experience a lag in trips after the onslaught of holiday tourists dies down. But Uber's announcement also makes sure to troll the competition: "With prices lower than a New York City taxi, Uber is now more affordable and accessible for residents across the five boroughs."
And in a e-mail sent to Uber users, "Today we're dropping uberX rates by 15%. Enjoy the same comfort and convenience of UberBLACK, but at prices that are cheaper than a taxi." The new rates apply to UberPool, the carpool option, as well. Granted, surge pricing still applies.
According to the TLC, taxis charge an initial $2.50, plus 50 cents per half mile or 60 seconds in slow traffic. Under the new rates, Uber X's base fare drops from $3 to $2.55, and the per-minute rate from 40 cents to 35 cents.
According to Uber, in 2012 Uber drivers in NYC carried passengers an average 16 minutes per hour. Now drivers are on the clock 32 minutes per hour, and hourly earnings have increased 33%. Uber credits this to its decision to cut fares in summer of 2014. "If drivers aren't busier as a result of these reductions, prices will go back up again," they said.
Earlier this month, the city quietly released a long-awaited study of the impact of Uber and other for-hire vehicles on traffic, congestion, and pollution in NYC. The findings were mild, and did not recommend a growth cap for the industry, concluding that Uber was not to blame for traffic and pollution issues in the busiest parts of Manhattan.
These findings marked an about-face for the city—as recently as July, Mayor de Blasio was warning New Yorkers about an impending "Uber flood" unless he took swift measures to regulate the industry.
While the startup maintains the right to adjust its fares at will, taxi drivers must charge fares set by the Taxi and Limousine commission. "Uber is keeping its drivers in poverty wages just so that the company can try to monopolize," New York Taxi Workers Alliance Director Bhairavi Desai said in a statement. "This is horrible."
McGuinness Management Corporation, a taxi dispatcher at the corner of McGuinness Boulevard in Greenpoint, had little recourse last year during the notoriously-slow summer months. As parked taxis gathered dust across the lot and along the surrounding side streets, owner Gus Kodogiannis said he could only hope for an uptick in business come Labor Day.