Uber Announces Price Cuts In 48 U.S. Cities

"A big part of the reason Uber has raised two billion dollar funding rounds is that offering service is capital intensive."

In some markets battling its rivals necessitates aggressive price cuts, while in others offering price reduction is a way to appeal to more consumers and widen awareness of its service.

With that in mind, the company has announced plans to cut prices in 48 of its “newer” cities in U.S. that have no experienced cheaper rides as yet.

What’s interesting about this impending mass price drop is that Uber is, for the first time, ‘guaranteeing’ that drivers in cities with price cuts will actually make more money from its service.

“We’re so confident in the earnings gains drivers will see that we’re making earnings guarantees in every city where we’re cutting prices. We feel that it is important for drivers to have this kind of certainty and comfort going into a price cut,” the company said in a blog post.

Read more: Uber — which is a very data-driven company, for better and for worst — uses two examples to back up its prediction.