Starting Friday, Uber fans in New York City will enjoy lower fares, as the ride-hailing startup seeks to lure customers away from traditional taxis. But advocates for cab drivers say the reduction is no bargain for workers.
In a blog post, the ride-hailing service said it's cutting rates on its UberX and UberXL services by 15 percent in a bid to boost demand during the slower winter months, while at the same time undercutting New York Yellow Taxicab fares.
"With prices lower than a New York City taxi, Uber is now more affordable and accessible for residents across the five boroughs," Uber said.
Starting today, the base fare in the Big Apple drops to $2.55 from $3; the per mile rate falls to $1.75 from $2.15; and the per minute rate slips to 35 cents, from 40 cents. The minimum fare is now $7 instead of $8.
The reduction means a trip from Midtown Manhattan to LaGuardia Airport in Queens will now cost $37.12, down from $43.67, while the short jaunt from Chelsea to the East Village now runs $11.20, down from $13.18, according to Uber.
Though the fare cuts will result in drivers making less per trip, Uber said it expects workers to benefit "because when demand increases, there's less idle time" between trips.
The point of the rate cuts is to increase business, Uber spokesman Matt Wing said. And if they don't, "We can always reverse them."
News of the fare cuts prompted an angry response from the New York Taxi Workers Alliance, which planned to stage a protest rally outside Uber's New York City headquarters in Queens. In an email, the taxi drivers union said, "Uber wants to monopolize taxi service, and destroy drivers in the process."
According to the union, 80 percent of Uber drivers work part time -- 15 to 20 hours a week -- and earn $1,300 a month after commission, and before fuel and vehicle charges. Those figures suggest that New York Uber drivers earn the equivalent of $16.25 to $21.67 an hour -- significantly less than $30.35 an hour they make, according to Uber's own data.
Uber, which is valued at upwards of $50 billion, making it the world's most valuable startup, has grown quickly since launching in June of 2010. Yet while the company has spread to cities around the U.S. and overseas, it has drawn fierce criticism from taxi groups, which accuse the company of trying to drive down industry wages.
Local officials also have raised concerns about Uber skirting taxi and labor rules, claiming that putting more vehicles on city streets hurts the environment and worsens traffic congestion. Backed by New York Mayor Bill de Blasio, the New York City Council last year considered a bill that would have curbed Uber's growth, although the proposal was later withdrawn.