Just last week, ride-sharing startup Lyft announced that it was entering three new cities, launching in Indianapolis, St. Paul, and Atlanta ahead of the holiday weekend. Well, local incumbent Uber isn’t going to take that lying down. The company has launched its low-cost uberX service in three new markets, and will be giving free rides to users for the rest of the month.
Uber announced on its local blogs in Indianapolis, St. Paul, and Phoenix that it will complement its existing black car and SUV services with low-cost uberX rides in those markets. That’s notable because two of the three are some of the newest markets launched by competitor Lyft. (uberX has already been operating in Atlanta since June.)
Fighting against comparably priced competition may be one thing, but Uber is making Lyft compete with free — at least for the month of September. Along with the uberX launch, the company is also offering up to five free rides worth $20 each in Indianapolis and St. Paul through the end of the month, and up to three free rides to uberX passengers in Phoenix through September 18.
Today, Uber offers service in more than 40 cities worldwide, including 22 cities in the U.S. But in most of those cities, it partners with third-party black car companies for drivers. With uberX, the company usually offers a mix of commercially licensed drivers who pick up riders in hybrids, along with non-commercially licensed drivers picking up passengers in their own cars. It’s not clear how many of each Uber has in its new markets.
Of course, Uber has some money to burn while keeping the competition at bay. It just raised a $258 million round of funding from Google Ventures, giving it a pretty massive war chest.
Uber has also announced plans to roll out its own ride-sharing services in any new market that its competitors enter. When it made that announcement this spring, it said it would wait until local regulators gave “tacit approval” of ride-sharing before moving in, essentially waiting 30 days before doing so. But with these latest launches, it looks like Uber isn’t even waiting that long, and has decided not to give the competition too much of a head start before jumping in with its own low-cost services.
As a result, we can probably expect Uber to continue to be aggressive and introduce uberX in additional markets, as it sees ride-sharing companies like Lyft and SideCar enter cities that it already operates in. Which, of course, makes this round of ride wars really interesting to watch.
Ride on, game on, and may the best app win.