Stay on Top of Emerging Technology Trends Get updates impacting your industry from our GigaOm Research Community

On Christmas Eve, Uber announced a significant change to its Uber Taxi pricing in New York City. The fare increase is simple: Any UberT hailed will come with a $2 “booking fee,” charged to the credit card on file. The new policy goes into effect today.

UberT is different from other Uber cars. Uber Taxi cars are fully medallioned yellow (or, in Manhattan’s far reaches and outer boroughs, green) cabs. Riders who hail one through the app pay a traditional metered fare to the driver, no different from any other yellow taxi in the five boroughs. Essentially, Uber could hail a taxi for free — especially handy for hailing cabs for friends or family if you don’t want to cover their ride on your credit card — and now it costs $2.

The pricing change is likely to push customers to Uber’s other car services, like UberX, which charge directly through the app. In fact, the second half of the announcement takes the opportunity to “introduce UberX, the low-cost Uber.”

In an email sent to customers, Uber says the new fee is “on behalf of yellow and boro taxi drivers who utilize the Uber platform,” although the fee is collected by Uber and the driver does not get a portion of the fee. I’ve reached out to Uber and will update the post if I hear back.

(Side note: When asking about tipping policies last month, Uber disingenuously pointed me to its Uber Taxi policy, because it’s the only Uber service in which the driver can collect a tip from a credit card, because Uber doesn’t handle the transaction.)

The text of the email is below:

Thanks for riding UberT. Starting today, December 25, all completed UberT trips will be subject to a $2 booking fee. This fee is a small charge added to uberT trips on behalf of yellow and boro taxi drivers who utilize the Uber platform. The fee will be collected through the app and billed to the card on file at the end of your ride. You will continue to pay the metered fare directly to your driver. We want to take this opportunity to introduce uberX, the low-cost Uber. Cars on uberX are hybrids or mid-range vehicles in a variety of colors, and with rates cheaper than an NYC taxi, there’s no better way to get around! For more information, visit our city page here. Feel free to contact us with any questions at [email protected] Uber on, Team Uber NYC