According to a couple of financial calculations executed by Forbes, Ubers’ “newly” announced UberX service is losing money. UberX is a cheaper “version” of the regualr Uber experience, where UberX chauffeurs drive “regular” vehicles, unlike the luxurious and high-end machines Lux Uber drivers have.
According to Business Insider, UberX cuts the price down by 25%, meaning that instead of paying $15 for a ride, you’d lay out about $11.25. Though Eva Behrend, Ubers’ spokeswoman, informed Forbes that Uber drivers will actually get to keep about 80% of the original $15 ride, ultimately meaning that Uber ends up paying the driver $0.75 to up the $12 wage. So as of now, the $17 billion valuated company is finding itself in a little of a frictional situation. Thankfully though, UberX seems to be a temporary option for the customers as it’s projected to magically fade away by the end of the summer.
Though I have to say, it’s no surprise that Uber has decided to run their UberX at a loss as they’ve been aggressively promoting their unique service and exceptional brand, giving away free rides and deliveries in order to promote the revolutionizing concept that will, pretty much, demolish the Taxi “industry” in the near future, which we already have been seeing signs of as several Taxi services around the world have been striking against Uber, claiming that the startups’ usage of a geolocalisation based app to calculate fares and request a ride poses an unfair advantage. Tough Luck!
Picture Credit: Techinasia