Starting today, Uber will be lowering prices in over 100 U.S. and Canadian cities. The transportation network giant is not immune to the slump of the changing seasons. “… When people hunker down at home, demand for rides drops,” the company said in a statement. The lull in business also hurts the drivers, many of whom rely on early-year fares to pay off their holiday credit card bills.
By lowering prices, Uber hopes to stimulate demand and offset the winter losses. The company cites its five-plus years of experience as reason enough to employ this strategy, which it has used for select cities over the past couple of years. In those areas, driver earnings have increased.
Since people prefer to stay inside during the cold months, nobody is moving their cars, which creates an even greater strain for parking in crowded cities. Uber hopes to reduce your Netflix and chill sessions by getting you out the house to face the chilly weather.
The higher demand actually leads to lower wait times, since the cars are constantly moving people around. It will also help to keep prices down, as the company will have no choice but to raise rates again if drivers are sitting around waiting for fares. In the meantime, those drivers are guaranteed earnings around the clock.
The price-cutting strategy does not always work, however. In 2015, earnings fell in some cities, and the rates had to be increased and adjusted. Uber cites Charlotte, N.C. as an example, where a 40 percent cut had to go back to 29 percent, after which drivers earned 20 percent more for the year. In Seattle, the lowered price had to be reversed entirely.
Each city is different, with Uber looking into economic circumstances, distinct regulations, and competition. The company is constantly running tests to give riders better value while also providing steady earnings for drivers.
Uber currently operates in 67 countries and over 300 cities.
- Ford recalls 100,000 hybrid cars over fire risk
- Looking for a side hustle? Drive with Uber and start earning
- Asus lowering Nvidia GPU prices by up to 25% on April 1
- Nvidia is asking the Biden administration to lower the price of GPUs
- Sonos is raising the prices of most of its speakers