Uber is putting the screws to New York taxis, and it's announcing the move with a Christmas Eve news dump. This morning, New York City Uber users received an email saying that anyone hailing a yellow cab through Uber’s service will have to pay a $2 surcharge.
New York users have the option of hailing a yellow cab using Uber’s app, or hailing one of Uber’s black cars. This summer, Uber cut fares on its UberX black cars by 20 percent and touted the fact that they’re now cheaper than yellow cabs. (Bloomberg found Uber to be very slightly cheaper.) Now the company is further undercutting the New York taxi industry, not by lowering fares again, but by hiking the price of hailing a cab through its app. Considering how convenient hailing through Uber’s app is, and that cab fares were neck-in-neck with UberX's, adding a $2 surcharge to yellow cabs is a significant blow.
Uber isn't lowering prices, it's hiking the price of its competition
In its email, Uber claims the fee was added for the benefit of drivers, though the fee will be going directly to Uber. "This fee is a small charge added to uberT trips on behalf of yellow and boro taxi drivers who utilize the Uber platform," the email says. An Uber representative said in an email that the fee is designed "to cover costs associated with provisioning the platform." Similar fees have been put in place in Washington, DC, and Chicago.
The next paragraph is more direct about why the fee is bad news for the New York taxi industry: "We want to take this opportunity to introduce uberX, the low-cost Uber."
Earlier this month New York lawmakers introduced a bill that would allow yellow cabs to design their own e-hailing app. Given Uber’s rapid growth and its enthusiasm for destroying its competition by any means necessary, it’s likely too little too late.