Rate CutsRoundup

Friday Roundup: Uber Cuts Rates in 48 Cities

By January 9, 2015July 27th, 202059 Comments


    Before I dig in, I just wanted to give a quick shout-out and word of thanks to Jack Ross who’s been doing the round-ups for the past few months pro-bono and been doing a great job at that.  Jack is moving on to bigger and better things at VICE as a sports contributor so today I’ll be handling the round-up.

    Well the big news in rideshare happened yesterday afternoon when Uber announced a slew of fare cuts in 48 cities across the US.  Most cuts were in the 10-25% range but there were a few cities that saw their mileage rate cut in half.  Along with the cuts, Uber also rolled out a guarantee for peak hours that ranged from $14-$20/hr depending on the city and a guarantee for non-peak hours that ranged from $10-$14/hr.  This number is before Uber’s 20-25% commission so you can see that these guarantees aren’t really guaranteeing a whole lot.


    Uber’s Announcement: Beating The Winter Slump

    I’ll be releasing an in-depth YouTube video this weekend (now live below) with my thoughts on the whole situation but for now I think a wait and see approach is best.  Obviously there are a lot of drivers who are upset and for good reason, but the only thing I can possibly think of as to why Uber has made these cuts is to get more passengers out on the road.  As many of you have probably realized, the beginning of the year is a slow time for rideshare (especially compared to the Holidays) drivers and Uber is all about growth.

    Lowering prices means more passengers and more passengers means more growth for Uber.  It doesn’t necessarily mean drivers will earn more money (despite Uber’s best efforts to convince us otherwise) but it’s hard to tell without unbiased data.  Speaking of data, I find it odd that Uber has only released numbers for two cities (New York and Chicago) out of all the cities they operate in that show drivers are now earning more money than before.  It seems to me if drivers really did make more money with lower fares than they would be able to prove that with data for every city nationwide.

    Either way, these rate cuts definitely hurt but I don’t think they are the end of the world.  There are a lot of drivers out there who may feel that these rates are too low but there are also a lot of drivers out there who are going to make the best of the situation and figure out a way to persevere and work smarter, not harder.  I know I am.

    A couple good articles about the fare cuts:

    Uber trims prices in 48 cities to drum up more rides

    Uber’s Clever, Hidden Move: How Its Latest Fare Cuts Can Actually Lock In Its Drivers

    Here’s a good theory from Ellen Huet at Forbes and if it’s true, it may be a smart move by Uber.  Personally, I think drivers can make more than the guarantees though by working both apps (Lyft and Uber) at the same time.

    Ok on to some other stories…

    Uber and Lyft Expansions: Locations and Services

    This article gives a really nice breakdown of all the places Lyft and Uber have been expanding to worldwide and within the US.  But there’s only one thing missing: “Sidecar?  Anyone seen Sidecar anywhere?”

    Uber’s Latest Experiment Is Uber Cargo, A Logistics Service In Hong Kong

    It’s not often that Uber experiments with new services in foreign countries but maybe two established local competitors have something to do with that.  I think it’s cool that Uber is trying this out but sometimes I worry that maybe they are spreading themselves out too thin.

    Uber’s NYC Bases Are All Open For Business Again

    I read a story on Wednesday about 5 of Uber’s 6 NYC bases being closed down and then the next day they were all back up and running.  UberX has not taken off in NYC like it has in other cities and I wonder if it has something to do with the competition from taxi services.  From what I hear, taxis are pretty reliable in NYC and I even hear you can pay with a credit card!

    The Danger Of Calling Uber A “Tech Company”

    When did BuzzFeed start killing it in the reporting department?  Remember when they used to write all list-acles?

    Ridesharing and Car Insurance: A Little White Lie?

    One of my stories was picked up by The Zebra (who also released a cool infographic the other day) and they also made me realize that maybe I need a new headshot?  Any photographers out there? 🙂

    And if you haven’t read my article on the subject yet, it’s a must read: Rideshare’s Little White Lie

    So what do you guys think of the rate cuts and more importantly what are you going to do or not do about it?  Feel free to comment on any of the other top articles from the past week.


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    Harry Campbell

    Harry Campbell

    I'm Harry, the owner and founder of The Rideshare Guy Blog and Podcast. I used to be a full-time engineer but now I'm a rideshare blogger! I write about my experience driving for Uber, Lyft, and other services and my goal is to help drivers earn more money by working smarter, not harder.