The Next Pricing War: GetTaxi Promises to Double What Uber Pays Drivers in NY

Ron Srebro doesn't hold back when he talks about Uber.

'Uber is trying to bully everyone, to destroy everyone,' says Srebro, CEO of Gett, the U.S. division of ride-hailing service GetTaxi. 'We don't think we need to destroy or be illegal or play dirty to be disruptive.'

On Wednesday, Srebro and Gett took a step to try proving that point. The taxi startup announced that all its drivers in New York will now earn at least $0.70 per minute after tax as well as collecting the tip, a rate that Srebro says is 'doubling the pay of Uber.' (Uber could not be reached for comment on its current pricing.)

Gett had previously paid its drivers a fixed price for rides, rather than a per minute rate. Under the new terms, a driver taking a passenger from Wall Street in lower Manhattan up to the Upper West Side would earn about $42 for the ride, compared to $25 previously. What makes that figure particularly staggering is that Gett currently has a $10 flat fare for all rides in Manhattan.

The startup is subsidizing the better pay for drivers by taking funds out of its marketing budget.

'We looked into our marketing budget and we thought, 'What we can do with that?'' Srebro says. 'We realized instead of buying billboards at every street corner, we could take that money and put it to use for our users and for our drivers.'

GetTaxi is in the process of raising a $150 million round to take on competitors like Uber. While that funding is certainly significant, it falls well short of Lyft and Uber, which raised $250 million and $1.2 billion in funding earlier this year, respectively.

Uber and Lyft have waged an aggressive price war against one another in recent months, potentially lowering the take-home pay for their drivers. The best case scenario for Gett, according to one analyst, is that drivers who typically work for multiple ride-hailing services may shift more attention to Gett fares because of the pay increase.

'Taxi drivers may choose to be available for GetTaxi alerts as opposed to Uber because they make more money,' says Anthony Mullen, an analyst with Forrester. That said, Mullen stresses that drive contracts are non-exclusive, which make it difficult to lock them in to any one service.

News of the Gett pay change comes one day after Hailo, another taxi app, announced that it would be abandoning the U.S. market amid tough competition from Uber and Lyft. According to one report, Hailo struggled to sign up drivers in New York.

'I really understand Hailo's move. It's a very, very competitive market,' Srebro says. He believes Gett has enough variety in its revenue streams, including from a service for business customers, to survive in that competitive market.

For now, the plan is to offer the better driver rates indefinitely. As for the $10 flat rate for passengers? It will 'probably' be extended beyond the end of this year. Probably.