Uber defends price drop amid objections by its drivers

The ride-booking service is cutting its prices by 20% in the South African cities it operates in from Thursday‚ as it tries to mitigate expected lower demand from passengers in the Winter months.

On Wednesday‚ Uber drivers reported to number 200 protested against the price cut at the Uber headquarters in Cape Town.

Alon Lits‚ general manger for Uber in Sub-Saharan Africa‚ told a news briefing in Johannesburg that the number of protesting drivers was closer to 50.

He said that the drivers had been consulted regarding the changes in pricing.

The company confirmed that the price per kilometer had been cut from R7.50 to R6 in Cape Town Durban and Gauteng (Johannesburg and Pretoria). The price charged per minute was also cut R0.75 in Johannesburg and R0.70 in other areas to R0.60.

Lits said that during winter months‚ riders tend to venture out less‚ impacting drivers.

The price cut was intended to stimulate demand from passengers.

The company said it was confident that the lower prices would not be negative for their revenue‚ stressing that this would increase the amount of rides as more people would be willing to use the service. The company added that lowering the price in other markets had resulted in increased demand in cities like Istanbul.

The results of the lower prices on the business would be monitored on a daily basis through metrics‚ Lits said.

He said‚ depending on those results‚ prices would remain or change.

Lits said that the company hoped it would be able to increase revenue by more than 20%.