UberX Wages War On Bay Area Taxis With 25% Price Cut

If Uber’s intent to put taxis out of business wasn’t clear already, the email it just sent SF Bay Area users should make it crystal. “We just dropped uberX fares by 25%, making it 45% cheaper than a taxi.” No matter how much people want hard-working cabbies to be able to support their families, uberX is now just too much cheaper for most people to ignore in San Francisco, the East Bay, San Jose, “and everywhere in between”.

Unlike last time it cut fares in January, Uber is focusing on taxis and didn’t even put a pink “other” bar on its pricing graph, which was surely an allusion to Lyft. Either Uber thinks it doesn’t have to worry about Lyft or doesn’t want to remind its customers about them. Either way uberX has now gone from costing 15% more to 13% less than a pink mustache ride around SF. Of course, that’s without surge pricing, which seems to boost uberX prices higher and more frequently than Lyft’s “Prime Time” pricing.

Lyft cut its own prices in April, allowing it to keep up with Uber. Now it will have to decide if it can afford to do it again. UberX is still more expensive in NYC than taxis, but you could imagine Uber dropping prices in a market until it breaks the local taxis, then moves the cuts to another city. Uber’s massive $1.2 billion funding round it raised earlier this month gives it plenty of room to starve out competitors.

Taxis were already struggling to compete. With inconvenient meatspace hailing, unreliable scheduled pickups, beat-up cars, and unaccountable drivers, many people think the taxis deserve to go the way of the dinosaur. There’s no denying that uberX is great service, and I use it frequently.

Still, others laud the navigation skills of veteran cabbies compared to uberX and Lyft drivers that are often new to professional driving or the city they operate in. There’s also an argument that taxi companies and drivers should be protected because they invested in $250,000 medallions that are earning them less money as Uber and Lyft compete for their business.

But with uberXs costing just over half of what a taxi does, most people would probably put up with a wrong turn or two. The president of big SF cab company DeSoto Hansu Kim told the Examiner that “with Uber, Lyft, and the like, he would be surprised if the cab industry survives another 18 months in The City.” And that was before today’s 25% uberX fare cut.

There’s an ongoing debate about whether cities should regulate services like Uber and Lyft. That could balance out competition with cabbies who invested in medallions, but impede innovation, degrade service, and raise prices for consumers. Cities better make up their mind, though, otherwise there soon might not be taxis in business to regulate.