Uber's car service is now cheaper than a New York City taxi, according to the company.
The San Fransisco-based car service made the claim Monday when it announced a 20 percent price cut to UberX fares on its blog.
"From Brooklyn to the Bronx, and everywhere in between, UberX is now the most affordable ride in the city," Uber said in the statement.
The lower fares come with an asterisks — they are only temporary with the chance to become permanent.
"These prices are only in effect for a limited time. The more you ride, the more likely we can keep them this low!" the statement also said.
(Photo : Uber) A set of graphs by Uber showing the changes in UberX fares versus a New York City Taxi.
Marcus Wohlsen at Wired laid out what the decreased fares means for Uber's drivers as well as the reason behind the company's decision.
"Uber wants to grow as quickly it can, and right now, it's chasing that goal by undercutting the competition on price-even if it loses money in the process," he wrote Tuesday. "This isn't a novel approach among tech startups, for which profits aren't valued nearly as much as popularity."
Wohlsen also noted some thing others have pointed out about the fare decrease.
That follows a 25 percent decrease in the San Francisco Bay Area announced last week, and a similar drop in Los Angeles UberX prices revealed earlier last month. The company says UberX drivers in California (though apparently not in New York) will still get paid their standard 80 percent portion of what the fare would have been before the discount. As Forbes' Ellen Huet points out, the arrangement means a San Francisco ride that once cost $15 will now cost passengers $11.25, but the driver still gets paid $12.
Uber is going to lose money in the New York City area as a result, but that's part of the plan.
"Its strategy here is much less traditional taxi and much more typical dotcom: grow the user base as quickly as possible and worry about making money later," Wohlsen said.
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