Beating Uber…by raising rates?!?


Fending off the Uber invasion seems to be something of a hopeless cause in New York City. But that doesn’t mean the legacy car service operators are simply giving up. I have an account with one of the legacy companies here and I received a letter today letting me know that it is not taking the Uber battle lightly. In fact, there’s a new weapon in the fight: Higher rates.

Yup. Higher.

Here’s how the letter starts:

As many of our customers know, the Black Car Industry has undergone massive changes in recent years. Over the last few years our industry has been invaded by highly financed entrepreneurs who have used technology to impose new rules and business practices without regard to the financial impact on the customer and the overall health and future of the business.

Putting aside the many bits of creativity taken with respect to punctuation and structure, it is clear that the company is upset. And that it has no idea how to express that outrage.

The letter goes on to remind me, the customer, that the company offers some of the best “business arrangements” for drivers and that it is trying hard to retain those drivers. Which seems to be a way of saying that it wants to pay the drivers more. Apparently that more comes in the form of a surcharge paid by the customer; not so sure about how that’s taking the financial impact to the customer into account in a positive way, but it is what it is.

For all reservations where the pickup time is during Peak Hours a $25.00 Peak Time Charge will be added in addition to the base trip fare.

This is for reservations only, “ASAP” and On Demand Calls, will not be subjected to a charge.

The letter also indicates that the charge may just be temporary. Except no way that actually happens.

If NY TAXI AND LIMOUSINE COMMISSION (TLC) decides to put restrictions on the mobile APP companies than [sic] we will remove the charges.

So we’re going to try to hold our customers hostage to higher rates, just in case that has a chance of getting the TLC to change the rules.

The letter goes on to mention that this winter a mobile APP will be released from the company. It will allow booking a car and tracking the driver’s location in real time, just like the upstarts, but the key is going to be higher charges. And even then only for the customers who are crazy enough to book in advance. And, to me, that seems a questionable move.

It seems to me that the core customer you want to keep is the one who books in advance and whom you can plan driver schedules around, ensuring that sufficient resources are available. And raising the prices on those customers isn’t going to keep them around. I just don’t get it. Then again, raising the rates on the ad hoc customers would almost certainly backfire as it would just push them to other services.

The whole thing is a bit bizarre, to be certain. I’m mostly just happy I rarely have a reservation for a pickup and that when I do it isn’t in the peak hours.

And I’m all in favor of making sure that the drivers are making a livable wage. I’ve previously mused about that aspect of the business and how the numbers don’t seem to add up. But this is still quite far from what I ever would have expected to see as a response.

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Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, and LinkedIn.

4 Comments

  1. If I were not an Uber customer, getting this letter would make me want to try them out just to save myself a $25 booking fee. This just seems crazy

    As for paying the Uber drivers a living wage, certainly in the countries I have used Uber in and had a chat with the drivers, they love it. Indeed in London, the last driver I spoke to said he was considering leaving the taxi business after 25 years (he used to drive a black cab and then mini cabs) but after trying out Uber, he had decided not too.

    I am sure that in some areas, conditions may be different but there seems to be a lot of “words” being thrown about so perhaps, if somebody is concerned about Uber and the way it treats its drivers, they should ask an Uber taxi drive for themselves as a lot of the “stories” online from people who claim to be ex Uber drivers don’t ring true

  2. There are just some people who just don’t get it.

    Business is down due to competition so we’re enhancing our offerings to provide you with better black car services – starting immediately;
    $25 price increases all around
    New Fuel $1/mile fuel surcharges
    $5 per bag loading fee (1 briefcase may still be carried inside the car with you).
    .50 red light fee that helps keep our fuel surcharges the lowest in the industry
    $200 airport pickup and drop off fee (road tolls are not included).
    We will no longer pickup passengers during adverse weather conditions, so that you can keep warm and dry inside the closest building.

    Thank you for your patronage.

  3. sounds like their customer base is institutions who may not care or find switching vendors too difficult. If direct to consumers its suicide.

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