Uber goes low cost in Bucharest to draw more users and drivers

Popular car ride app Uber has decided to cut the base fees for its Uberx and UberSELECT services in Bucharest and to lower the admission criteria for drivers, according to a company announcement. Uber thus hopes to increase its driver base and the number of users. “These changes have a clear objective: to open the Uber platform to a broader public. The new tariffs will allow more people to press a button and ask for a cheap ride and we expect the requests for Uber services to grow considerably in the following months, which will also bring higher revenues to our partners,” said Nicoleta Scroeder, general manager of Uber Romania. “At the same time, we change the access criteria so that more drivers get the chance to earn revenues by driving their own cars,” she added. Uber will cut the base fee for its UberX low cost service by 10%, from RON 1.45 per kilometer to RON 1.3/km, which is even lower than what local taxis charge. Most taxis in Bucharest charge RON 1.39 per kilometer. Thus, a ride from the Gara de Nord train station to the Regie student compound should cost RON 8 (EUR 1.8) in normal traffic conditions. By giving this example, Uber clearly points out that it expects more students to use this service. The price for the UberSELECT service, which offers higher quality services, especially because of better cars, will drop by 30%, to RON 1.65/km. Thus, a ride from Victoriei Square to the Parliament’s Palace will cost about RON 11 (EUR 2.47). Uber will also allow people who own cars older than 10 years, but not older than 15 years to join the platform as drivers. So far, the maximum age of cars accepted on the Uber platform was 10 years. UberX will include Dacia Logan, Peugeot 207, Skoda Fabia, Volkswagen Polo, and Renault Clio. The UberSELECT service will have more expensive models such as Dacia Duster, Audi A3, Citroen C4, and Ford Focus, among others, up to 10 years old. Uber will grant guaranteed revenues to the partner drivers in the following period, to help them through the transition period. The lower fees and higher number of partners may lead to a drop in revenues until the number of users also increases. However, Uber expects that on the medium and long term, the drivers’ revenues will increase due to a higher number of users. Uber, whose goal is to make urban transport as accessible as running water, entered the Romanian market in February 2015 when it launched its service in Bucharest. Initially, the base price of the UberX service was RON 1.35 per kilometer, but the company increased it to RON 1.65/km in December. Then, in April, Uber cut the price of the service to RON 1.45/km. The base price applies in normal traffic conditions. However, during high-traffic periods or when there are few drivers available, the fee increases. On the other hand, the app allows the users to see the price of the ride beforehand and to accept it or not. This feature has made the service very popular in Bucharest, where the taxi service lacks transparency and quality. Taxi drivers in Bucharest often refuse short rides or ask the clients to pay higher fees than the official ones to take them from one place to another. This usually happens around the train station and in other busy areas. Uber's success on the local market has determined other players to enter the market.