Uber cuts prices in fare war with New York City taxis

NYC taxi Uber's price cut puts it into direct competition with New York's iconic taxis

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Mobile car hire service Uber has temporarily cut the price of its cheapest service, UberX, by 20% to match the rate of New York City's yellow taxis.

The move follows similar price decreases in San Francisco and Boston.

Most analysts see the move as an effort to undercut competitors like Lyft and Hailo, as well as attracting newcomers.

Uber drivers - who are paid around 80% of the total fare - will be forced to accept lower payments as a result.

In a blog post announcing the fare changes, Uber countered: "What we've seen in cities across the country is that lower fares mean greater demand, lower pickup times and more trips per hour — increasing earning potential and creating better economics for drivers."

Uber chart Uber published a chart showing the claimed fare differences between its UberX service and traditional taxis

In June, Uber raised $1.2bn in capital, in a move which valued the car-sharing service at more than $18bn.

However, it has faced competition from other firms, questions from regulators and angered traditional taxi drivers in cities across the globe, from Berlin to Paris to Madrid.

A protest by cab drivers in London in early June caused widespread gridlock, and France has recently been mulling a ban on GPS for car-sharing apps.

New York City's Taxi and Limousine Commission did not reply to a request for comment.

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