Six weeks after cutting fares in Brisbane by 20%, ridesharing app Uber has taken the knife to prices in another capital where it remains illegal, shaving 15% off the cost of UberX in Melbourne from today.
Fare cuts in winter have become something of an annual ritual for the $50 billion San Francisco-based digital business. Last year, fare rates in Sydney dropped by 10% and Uber claims that when it reduced uberX prices in Melbourne last year, “the result was many more people choosing uberX to get around, and Uber’s driver-partners spent less time online waiting and more time on trips, creating a more efficient use of their time”.
As it always argues UberX says the 15% cut will “get more riders on the road taking more trips, and in turn increase driver-partner earning potential”.
The company is offering an olive branch to drivers, saying it will guarantee $30 gross per hour minimum until April 25.
While UberX, which uses private cars and drivers, was legalised in NSW and the ACT last year, it remains illegal in Victoria.
A taxi in Melbourne costs $4.20 flagfall, plus $1.62 per kilometre and 56 cents per minute. UberX will now be priced at $2 flagfall with a $1 km rate and 32 cents per minute drive time.
Here’s what Uber, which is notorious for its price surges when demand is high, says about the move:
Pricing is a science, and each city is different – over the years, we’ve learned more about the choices riders make, and how those choices impact earnings for driver-partners.
In the coming month, we’ll be watching closely to see if riders are taking more trips, and if we find that driver-partners aren’t busier as a result of these reductions, Uber will review prices again.
Uber produced a map showing what it estimates fares will be. At $42 from the city to the airport, UberX is around 30% cheaper than a taxi.
Unlike Sydney, where you can book a taxi via Uber, the company has no links with the industry in Victoria.
The price cuts only apply to UberX and uberAssist, and not the hire car business, UberBlack.
Just as Uber cut prices in last winter, don’t expect the discounts to last. In August 2015, the company put prices back up 10%.