Uber has been cutting prices for its lower-cost UberX cars since the budget ridesharing service launched in 2012, and the reasons are obvious: Get more people into more cars more often. But Uber CEO Travis Kalanick wants it to be so affordable you'll give up your own ride.
Speaking with the New York Times, Kalanick discussed the recent 20-percent price cut on UberX cars in NY, and when asked where it's all leading, he said:
The whole point of price cuts is to get UberX pricing below the cost of owning a car. Let's say you take three or four trips a day on average. If we can get the price of UberX low enough, we can get to where it's cheaper to take Uber than to own a car.
Kalanick concedes that Uber drivers can only make so many trips per hour, and that to really make a difference, the service has to expand while remaining inexpensive enough to keep middle-class and lower middle-class riders calling cars. Uber has always said the price cuts are temporary, but Kalanick says if it can expand its reach, those prices could remain low and the company would still turn a profit. And naturally, he's putting a humanitarian spin on it:
There's a ton of really great outcomes that happen in cities when every fully utilized Uber car takes 20 cars off the road. Parking, congestion, these things really benefit from this. Riders benefit, drivers benefit. You're creating more jobs in the city, which is good. Riders are getting better value for their dollar.