Uber fare cuts in some cities draw criticism from Charleston cab business

The ride-hailing app Uber expanded to Charleston and other South Carolina cities in July.

Uber raised concerns among its fleet of freelance drivers last week when the company announced it has reduced ride fares in cities across the country to beat the "winter slump" and gain an edge on other taxi services.

While Uber's prices haven't dropped locally, the issues arising in other cities highlight the complexities facing the city of Charleston as it drafts an ordinance to regulate the car service.

Uber said in a blog post Thursday that it was reducing prices in 48 cities where Uber recently launched - such as Atlanta, Charlotte and Wilmington, N.C. - "to achieve better outcomes for both riders and drivers" during the slow, winter months.

Uber spokeswoman Kaitlin Durkosh said the company has no immediate plans to reduce prices in Charleston.

The new fare structures will vary by market. In some cities such as Nashville, rates have been reduced to 73 cents per mile and 14 cents per minute on top of a $1 base fare. It's unclear what the exact rate was in Nashville before the drop, but in Charleston, Uber typically charges about $1.75 per mile, 20 cents per minute and a $1.95 base fare.

Uber said it has pledged to offer drivers minimum earnings so the price cuts won't reduce their income.

"We expect that these seasonal price cuts will help bring newer Uber markets in line with our larger ones with lower costs for riders, higher earnings for drivers, shorter wait times for both, and a better experience for all," the blog post said.

Many of Uber's freelance drivers, who earn 80 percent of the fares they collect from passengers, see it differently. On a popular online forum, Uberpeople.net, dozens of drivers who use alias user-names expressed doubt that the earnings guarantees would offset the deep price cuts and the cost of operating their own vehicles.

James Jones, president of Charleston Cab Co., said if Uber drivers earn less, that's ultimately going to be a safety issue.

"If you have minimum-wage drivers on the road in their own cars, they're not going out there to buy new tires like taxi companies do, or making sure their cars are in the best condition because they won't be able to afford to," he said, adding that's part of the reason Uber's practice of drastically reducing prices is "a nightmare" for the traditional taxi industry.

"For a cab company to try to keep a cab on the road at 73 cents a mile, you can't make a profit on that," he said. "And that is the next thing that's coming. They're going to try to disrupt the price mechanism in this town."

Most major taxi cab companies in Charleston are against the city's proposal to regulate Uber differently from taxis and limousines, especially if the ordinance exempts Uber from fixed-fare structures that taxis must abide by.

Another fare-related issue city officials will have to consider is Uber's practice of "surge" pricing, or charging multiple times the normal fare during periods of high demand. City Councilman Bill Moody, chairman of the Traffic and Transportation Committee, has expressed concern about that issue, but he's unsure how the committee will handle it.

Reach Abigail Darlington at 937-5906 and follow her on Twitter @A_Big_Gail