Uber is rolling out rate cuts in more cities
Uber, the embattled but fast-growing ride-sharing service, announced that it's not only cutting fares but also making earnings guarantees to its drivers where it's cutting prices.
The app-based service has hit its share of bumps in the road. The taxi industry has challenged it at every turn, asserting that Uber is essentially an unregulated cab service.
Uber has faced lawsuits around the U.S. and legal action around the world. The service was banned in Spain, and its CEO was indicted in South Korea for running an illegal cab operation.
Those are on top of story after story about crazy overcharges, drivers accused of sexual assaults and drivers lamenting a lack of pay.
So, Uber is trying to sweeten the pot for both passengers and drivers.
"At Uber we're always looking for ways to deliver lower prices to riders to make Uber an everyday transportation option," the company said in a blog post. "In the last year, our largest cities have seen price cuts to deliver on that promise. The upside for the rider is obvious, but also important is that with the increased demand, drivers' income goes up as well. More demand turns into significantly more efficiency for the driver, more trips for every hour, and more earnings for every hour on the road."
The company cited its experience in Chicago as evidence of the plan's success. Fares have dropped 23 percent, the company said, while drivers are taking in 12 percent more per hour. The average fare dropped from $14.25 to $11 year-over-year, Uber said, while driver pay rose from $19.10 to $21.34 in hourly bookings.
This strategy has yet to roll out in all areas, although Uber promised that more cities will see it soon.
"Of course, many of our newer cities have not yet seen the power of price cuts," the company said. "So as things slow in the winter season, we will be reducing prices in 48 of our newer Uber cities to achieve better outcomes for both riders and drivers, as we have seen in cities around the country."
