Uber’s war against entrenched taxi companies saw its most recent move Monday when the company announced that it would slash prices 20 percent in New York City.
An UberX, the cheapest ride offered by the company, is now several dollars cheaper than a traditional taxi in New York City, where yellow cabs are still a staple, Uber says.
Uber slashed its prices in Boston last month, knocking rates down a full 25 percent. The change would make an UberX trip from Copley Square to Harvard Square only $10. A taxi, the company says, would cost $17.
The company chose to leverage its recent funding influx, which totaled $1.2 billion, to make these deals possible. It has chosen to use that money to subsidize the cost of rides, while often paying its drivers the same amount.
Keeping driver salaries so high means Uber may actually be operating at a loss in some cities, according to New York Magazine.
But these lower fares may not be permanent.
Uber has cautioned that the cut rates would only last for a limited time, heeding customers that “the more you ride, the more likely we can keep them this low!”