Ride-sharing platform Uber has long been an avid devotee of the law of supply and demand, surging its prices when lots of people need a ride, even if it means facing scorn from customers and local politicians.
But Uber follows that economic principle when the opposite is true too.
On Saturday, the company dropped prices in more than 100 cities in the U.S. And Canada in an effort to spark demand among customers who are more inclined to stay home as cold winter weather sets in. Uber said reduced prices “[give] riders one more reason to head out of the house, ditch their keys, and avoid parking.” If lower prices don’t generate more rides for drivers, the rates will go back up, the company said.
Uber has implemented this strategy in some cities going back three years. In some cases it’s worked; in others it hasn’t. Last year in Charlotte, for instance, Uber rescinded a 40% rate reduction for a 29% cut, and driver earnings grew 20%. In Seattle, Uber scrapped a price cut altogether after realizing that “prices were already low enough.”
