Uber Wants To Offer A Low Cost Option In All Of Its Markets

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As we’ve chronicled, the folks behind Uber definitely have some balls. That’s why this standoff between the New York City Taxi and Limo Commission and the Bay Area-based startup is so fascinating. It reminds me of a very well-worn saying in startup land: “Ask for forgiveness, not permission.”

The NYC TLC has some sort of existing contract with Verifone and others for its current payments processing system, which precludes Uber Taxi from functioning as intended in its New York launch. Uber Taxi, in addition to UberX, is one of Uber’s lower cost options and makes the company more competitive with peer-to-peer transportation upstarts like Lyft and Sidecar.

Uber CEO Travis Kalanick views the conflict between Uber and the NYC TLC as a matter to be discussed. “We’re everyone’s private driver, not just rich people’s,” he says, subtly referencing DC’s “Uber clause,” where that city’s TLC had tried to make it illegal for Uber to charge ANY LESS than 5x as much. Sigh.

Eventually Kalanick wants the Uber app in all cities to include the option for a standard (black car) Uber and a low-cost Uber choice like UberX or Uber Taxi. “We’re rolling out,” says Kalanick, “There’s a Denver launch today that I’m not even at.”

Kalanick asserts that people shouldn’t be surprised by Uber’s “offer a low-cost option for all” strategy, especially after its aggressive efforts in New York and what he considers successful Uber Taxi launches in Chicago and Toronto, “For me it seemed obvious,” he says, “We’ve got our own game plan and we’re leading the charge.”

Kalanick is also uber confident that the company (and symbolically transportation innovation) will prevail in its current conflict with the New York City Taxi and Limo Commission. “In every city in the country I can call a cab. But not in New York, for the past 30 years. We’re trying to move transportation there forward for the long run. I think we can do it,” he says.

Right now Uber Taxi is free in New York for anyone who takes a ride under $25, but if/when the company starts accepting credit cards through the app, it will be flouting the TLC’s current regulations, according to its PR statement.

“We believe that’s legal,” Kalanick told me before the TLC released their statement, “But that doesn’t mean we won’t discuss it with the regulators. As, we’ve seen in many cities that just because a regulatory body doesn’t think something is legal doesn’t mean you shouldn’t do it. It’s okay to have a discussion … “

Kalanick tells me that he eventually wants a lower cost Uber, either UberX or Uber Taxi, to be available in all 17 cities the service is in currently and other markets it will expand into. He estimates that the lower cost options are about 33% cheaper than a normal Uber ride, which is 1.4-1.5x a taxi cab.

Kalanick is adamant that the efforts in NYC are an early sign of the new Uber direction. “A lot of folks built their whole business assuming that we wouldn’t do it.”