| SAN FRANCISCO
SAN FRANCISCO Jan 9 Uber, the red-hot rides
start-up known for jacking up town-car fares, is taking the
opposite approach with its no-frills UberX service.
Fares on UberX, which offers rides in ordinary cars at lower
prices than the company's high-end town car service, will be cut
in 16 cities, Uber said in a blog post Thursday.
Chicago, San Francisco, Seattle, Los Angeles, Phoenix and
Orange County, in southern California, will see the biggest fare
cuts, the blog said. Ten other cities will also see cuts.
"We're going all-in on being the cheapest ride in town,"
Uber CEO Travis Kalanick wrote.
Under the new fare structure, rates in the Los Angeles area
between Beverly Hills and Santa Monica would run $15.83 via
UberX, compared with $26.80 for a cab, he said. In the Boston
area, a trip from Beacon Hill to Harvard Square would run $12.55
for UberX, compared with $19.37 for a taxi.
Fares for the flagship Uber town car service, which
generally run at a premium to taxis, won't change. The company
has come under fire in recent months for its "surge pricing,"
under which it raises rates, sometimes by more than eight times,
when demand is high.
Uber connects passengers with drivers via a smartphone app
and makes money by taking a cut of the fare. It owns no cars
It has entered more than 60 markets, ranging from its
hometown of San Francisco to Berlin to Tokyo. Leaked financials
in December indicate that the company, which began connecting
passengers with drivers of vehicles for hire about 3-1/2 years
ago, is generating $200 million a year in revenue beyond what it
Investors, led by Google Inc.'s Google Ventures,
have given Uber around $400 million, valuing it at $3.5 billion.
With a service that stitches together the buzziest categories in
entrepreneurship -- among them mapping, smartphones and local
services -- Uber is widely seen as one of the hottest properties
in Silicon Valley.
Yet Uber still faces daunting regulatory hurdles that have
left it shut out of major markets such as Miami. Lawsuits, many
from taxi companies, are piling up, and competitors such as
Hailo, Sidecar and Lyft are coming on strong.