On-demand transportation startup Uber is making a serious commitment to its UBERx service. Today on the Uber Blog, the company confirmed what we reported last week — that it will be cutting fares on UBERx rides in an effort to be more competitive with ride sharing apps like Lyft and SideCar.
It’s been about three years since Uber launched its service as “Everyone’s Private Driver,” offering a convenient and reliable alternative to taxi cabs in San Francisco. Since then, the company has expanded pretty rapidly, offering its on-demand UberBLACK black car service in dozens of cities around the world.
At the same time, Uber has begun offering lower-priced options in many of its markets. In some cities, it’s launched UBERx, which is kind of like UberBLACK except that passengers are generally driven around in hybrid vehicles. In others, it’s partnered with local taxi drivers to launch UberTAXI. (In Paris, passengers can hail motorcycle taxis!)
Lower-priced options are becoming necessary now that Uber is facing competition from other on-demand transportation apps. On one hand, there are services like Lyft and SideCar, which connect passengers with community drivers — i.e. people who haven’t been licensed to drive commercial vehicles like taxis or black cars. And there’s also a proliferation of apps that hail taxicabs from a user’s mobile device, like Hailo, Flywheel and Taxi Magic.
San Francisco, which was the first market for Uber, has become one of the most competitive cities, with a wide range of low-priced options. With convenience and reliability becoming a commodity, now the battle has moved to price.
Even with its UBERx option, Uber struggled to compete with Lyft and SideCar. It had previously lowered fares by 10 percent, as it began to offer its own ride-sharing services, but still tends to be priced above other options. But today’s announcement will likely bring it in line, or even below, the fares offered by competing services.
Uber says that UBERx rides will now be priced at 10 percent cheaper than its UberTAXI service, and gave some sample fares to show users how much typical rides might cost:
uberX at cheaper-than-taxi pricing means never, ever waiting for a bus in the rain or walking alone at night. It means $8 from FiDi to AT&T Park, $15 from the Marina to the Mission, and $50 from North Beach to SFO. It means a single, cost-effective solution for dependable pickups in minutes, 24 hours a day, all over the Bay.
Now that Uber has lowered prices in its home market, the company could look to expand UBERx availability elsewhere. The company has already said that it will offer peer-to-peer ride-sharing services anywhere that its competition has gotten “tacit approval” to operate. We expect to see it make cheaper options available in even more cities as time goes on.