Great news! If you're an UberX customer in New York City, the rides are now 20 percent cheaper—less than yellow cabs! Bad news! If you're an UberX driver in New York City, you're now making 20 percent less money.
The company announced its latest fare slash in a blog post that offered some typically Uber-esque caveats:
We know you may be asking yourself how this affects our partner drivers. What we've seen in cities across the county is that lower fares mean greater demand, lower pickup times and more trips per hour — increasing earning potential and creating better economics for drivers. What does what mean in the long run? They'll be making more than ever!
Drivers will be making less, but they shouldn't fret—they're free to just work more than ever and recoup the difference. When Uber, which is known to play fast and loose with financials, says "increasing earning potential and creating better economics for drivers," it's asking everyone to just take that on faith, for now. Kevin Roose at Daily Intel puts it clearly:
Uber has been attempting to keep drivers happy by paying them the old rate even while charging passengers the new, lower rate — effectively taking a loss every time a passenger steps into an UberX vehicle.
That's not happening in New York, according to Uber's New York general manager Josh Mohrer, who said that city drivers will still make their 80 percent cut of the new, reduced fares.
It's just the free market at work—and by the free market, we mean venture-backed software offering services at a loss in order to cripple a regulated competitor.