The price war between UberX and Lyft shows no signs of a cease fire, at least here in Denver. I just received this email from Uber Denver saying it will be cutting prices by 20% for both riders and drivers. Previously, the company was taking 25% off rider fares, but it wasn’t touching the driver’s take.
Here’s a comparison of the rates:
Uber says that this will actually be good for riders because it will increase demand.It also predicts that UberX drivers will make more than they did in May, but less than in July, as shown in this graphic below:
Here’s more from the company:
Early this summer, Uber began a promotion that gave riders 25% off all uberX rides. Instead of cutting the rates for drivers as well, Uber has paid for this promotion to ensure drivers wouldn’t earn less while Uber invested in the growth of the city. In fact, during this promotion drivers have earned over $180 more per week on average. We’ve also seen drivers earning upwards of 28% more in weekly earnings than in May.
We’ve seen active riders increase well over 45% in the last month! They have also been spreading their Uber stories all summer long thanks to the phenomenal service drivers have been providing.
Uber’s goal is to ensure strong driver earnings and offer the best value to riders. Maintaining low prices will keep demand high into August and September, and help you do more trips during this time. From this promotion, we have learned that a 20% price cut will keep driver earnings higher than May peaks and keep demand at record levels. We have seen similar effects in other cities where lower rates result in increased trips and increased driver earnings.
Is UberX making the same changes in your market? Obviously this is good for passengers, but will it result in increased earnings for drivers? Let me know what you think!