Trending: Billionaire Paul Allen’s Stratolaunch space venture fires up its engines – all six of ’em

Photo via uberX.
Photo via uberX.

Uber is cutting prices in more than 100 North American cities to adjust for what are typically slow winter months.

The cuts, which go into effect this weekend and range from 10 to 60 percent, mean cheaper rides for customers. For drivers, meanwhile, it means less income.

Uber said that lowering prices will increase demand, which will increase the number of trips per hour. The company will also offer guarantees and “24/7 incentives” to qualifying drivers to make up for the lost revenue.

Uber, now valued at $62.5 billion, has done something similar for the past several years.

uber-logo“For some cities this is the third year in a row we’ve cut prices to fight the January blues,” the company wrote in a blog post. “Driver earnings in those cities continue to rise year after year.”

Seattle riders will not see price reductions. During its winter promotion last year, Uber lowered prices in Seattle, but actually returned rates to normal levels after finding that it didn’t increase demand like the company expected. Tacoma will see 25 percent price cuts.

Bloomberg reported that the cuts will be in effect “indefinitely.”

“While pricing is a science, every city is different: different economic circumstances; different regulations; different competition,” Uber wrote in the blog post. “We’ve learned over the years that we do best when we test new things. With each new test — small or large — we learn more about the choices riders make, and how those choices impact earnings for drivers.”

Harry Campbell, who runs The Rideshare Guy blog, has a good report on the cuts with specific rate changes for each city. He noted that Uber announced the cuts “after business hours on a Friday and didn’t even e-mail drivers about it.” Campbell called it “insulting.”

“Drivers like you and I have to find out from people in the media or even passengers,” he wrote. “It’s probably a safe bet that a lot of drivers will be working for Lyft this weekend.”

Campbell said that it is a “total lie” when Uber says cutting fares means more money for drivers.

“When rates go down, it may increase passenger demand but drivers most definitely make less,” he wrote. “And if they’re doing more trips per hour, their expenses are also higher.”

Added Campbell: “I’ll be curious to see what Uber offers in the way of guarantees, but I’m not expecting much.”

Like what you're reading? Subscribe to GeekWire's free newsletters to catch every headline

Comments

Job Listings on GeekWork

Find more jobs on GeekWork. Employers, post a job here.