There has been another assault in the burgeoning battle between ride apps and traditional taxis in Los Angeles.
See also: Ride-Sharing Apps Fight Back.
The ride-sharing brand Uber said this week that it is cutting its prices about 20 percent, to a level the firm says is 30 percent less than what cabs charge. The move will last two weeks but could become permanent if the results are promising, according to a company statement:
Why are we doing this? Because Uber is betting big on low cost service in Southern California. … In June in San Francisco, we cut prices for uberX by 25%, making it about 15% cheaper than a taxi with tip. Demand for uberX doubled!
This means war!
The company threw out some sample rates:
Santa Monica to Venice – $8 (vs. Taxi: $13 including tip)
LAX to Manhattan Beach – $16 (vs. Taxi: $23 including tip)
West Hollywood to Santa Monica – $22 (vs. Taxi: $31 including tip)
Sounds like maybe Uber drivers are in for a pay cut?
This in a fairly strong labor town where cab drivers are represented by unions and taxi companies have to jump through mad regulatory hoops, including limiting the number of cars that can be on the streets (and thus limiting the money operators can make).
[Added at 11:29 a.m: An Uber spokesman argues that when prices are cut, demand goes up, and drivers “make more.”].
The feel-good news from the Silicon Valley “sharing” companies (where's the sharing when you're paying someone to drive you somewhere) could be bad news for cabbies trying to feed their kids.
Just remember, tech companies are changing the world.
In June a city transportation official told the ride-sharing apps Uber, Lyft and Sidecar that they were operating illicitly in Los Angeles and that they needed to shut down.
The city's powerful taxicab lobby was all for that.
But not only did the three keep on trucking, but they were emboldened last month when the California Public Utilities Commission formally give ride-sharing apps the green light to operate statewide.
The city's cease-and-desist, by the way, still formally stands when it comes to the apps. But Mayor Eric Garcetti, who has expressed favor toward the online services, told City Hall's taxi regulator, Tom Drischler, to shut up about it. Really.