Uber’s slashed fares that went into effect on Friday were consistently cheaper than identical yellow- and green-cab rides — but sources told The Post the price cuts will increase demand and ultimately lead to more surge pricing.
Uber cut its base fare and per-mile rate by 15 percent in the Big Apple and lowered the minimum fare from $8 to $7 in a bid to attract more riders and carve out a bigger share of the market.
But the spike in ridership will trigger more frequent surges — when Uber uses a somewhat unpredictable algorithm to jack up prices at peak usage times, such as during rush hour, holidays and inclement weather.
A company source said the rate cut will ease the blow of the surges.
“You might see more surges, but they will be low-level surge prices,” the source said.
On the first day of its price cuts, Uber reigned as the cheapest ride in town — averaging about 20 percent less than traditional cabs for the same routes taken at the exact same time.
An Uber ride from the South Street Seaport to Carroll Gardens, Brooklyn, was 9.8 percent cheaper. A ride from DUMBO to the Javits Center cost 25.3 percent less; and from there to the News Corp building at West 47th Street and Sixth Avenue cost 23.6 percent less.
One of the Uber drivers said he supported all of the price cuts except for the new minimum fare of $7. “It’s a good strategy to decrease the price to get more customers, but at $7 you’re going to kill the driver,” he said.
In contrast yellow cabbies were livid about Uber undercutting their rates.
“Uber takes all the business,” said hack Sakhir Lo. “We’re losing a lot of money.”
Unlike black cars, green and yellow taxi rates are set by the Taxi and Limousine Commission. The TLC has declined to comment on Uber’s price cuts, but sources hinted that the commission could lower rates to compete.
Every two years, the TLC carries out an “in-depth” review its pricing strategy. The next review is supposed to happen in spring 2017, but sources said it could reevaluate prices before then if necessary.
City Council Transportation Chair Ydanis Rodriguez blasted Uber’s price change.
“We need to look at the repercussions,” he said. “The shocks this sends around the industry further weakens driver benefits, lowering the pay floor as they seek to be the only game in town.”