The on-demand car service known as Uber has slashed prices across the country — a move that some analysts believe could turn the transportation market on its head.
If you live in a major U.S. city and don't use your own car to get around, you may have heard of the ridesharing app Uber, which lets riders make on-demand requests to drivers for transportation.
If you don't use it now, investors are betting you will soon. According to AllThingsD, in August, Uber had a $3.5 billion valuation with the largest backing coming from private equity giant TPG and Google Ventures.
Forbes also rated Uber among its Top 13 startups of the year, claiming the app has gained traction with everyone from "drunk college students to overworked soccer moms."
The cuts in prices will specifically target the UberX service and will cut prices anywhere between 2 and 30 percent. UberX is not available everywhere, but the slash in prices will affect 16 major cities out of the 23 where that service is available. (Via WJLA)
With this cut in pricing, many tech writers say more people will be opting out of traditional taxis.
VentureBeat writes, "In general, Uber provides a valuable service that is much more reliable, dependable, and accountable than San Francisco's third-world cab system."
TechCrunch adds: "For a business that operates on low margins already, that's a pretty dramatic reduction. And it will put a whole lot of pressure on the competition."
Oh, and speaking of the competition, it's not going quietly.
Lyft, the other on-demand ridesharing app, has a response to Uber's new price cuts, writing in a statement: "Uber prices will still be higher. ... It's classic bait and switch and consumers see through that." (Via YouTube / LyftCommunity, TechCrunch)
And various taxi commissions attempted to impose substantial regulations on the new app in some major cities earlier in the year. Those cities include D.C. and New York. That's meant to help keep the traditional taxi service afloat.
"We're charged with keeping an economically viable taxi cab industry. We can't make decisions that allow one element in the industry to up end all the other elements." (Via ReasonTV)
Despite potential new regulations across the country with various taxi commissions, Uber has been able to not only operate but thrive. The company reportedly brought in upward of $200 million in 2013 and has about 1 million ride requests per week.