Facing a Price War, Uber Bets on Volume

It’s becoming a bit of a holiday tradition for Uber: ringing in the new year by lowering fares. Amid a price war with rival Lyft, the ride-hailing leader reduced its rates by 10 percent to 45 percent in 100 cities across North America. In Detroit, Uber drivers’ per-mile rate is less than it takes to cover their gas and the depreciation of their cars, according to IRS figures. “It’s depressing,” says Bill Scroggins, an Uber driver in Indianapolis. “I’m not even sure I want to drive anymore. It feels like I’m doing it for free.”

This is the third year in a row Uber has discounted fares in January. It calls the cuts seasonal but says they could last indefinitely. Last year rates never rose again in almost a third of cities; only in two did they return to precut prices. Uber has instituted temporary hourly wage guarantees to limit drivers’ earnings declines. It’s assured Scroggins and other outraged drivers they’ll come out ahead by making more trips an hour thanks to increased demand.