Price cuts funded by operational savings are bullish for Uber as they drive demand and reduce competitive threats from autonomous vehicles without hurting margins.

We've got some interesting news for Uber stock investors as the CEO Dara Khosrowshahi announced what he'll be doing with the funds from the cost savings the company has initiated and the lower insurance prices the company is paying.

I think this is really important for Uber stock investors to consider.

So Uber noted that it's using some of the money it saved from laying people off to cut ride prices. Uber will also use savings from lower insurance cost to reduce prices further still.

And that double lower price performance could be very positive for Uber. It could also lower one of its bigger risk factors, which is the risks from driverless car technology.

So, it's important to note this in the backdrop of Uber's business model. So, Uber doesn't own this inventory that's on the platform, right? So, it's not like a car company lowering prices, which has the impact of lowering profit margins.

It might even make the company unprofitable overall.

Uber brings together drivers and riders. So, lower prices doesn't mean that Uber's profit margins decrease. Lower prices just means that customers are paying a lower cost overall.

Uber is still taking its percentage of every transaction. In fact, Uber might increase the percentage it takes from every transaction, which is the revenue that Uber counts. The prices are the total dollars that customers are paying on Uber's platform.

And lower prices could encourage customers to take more rides. Lower prices could attract more consumers to choose Uber over Lyft or maybe another service provider.

So, this is, in some way, lowering the risk for Uber losing market share to driverless car technologies outside of Uber itself and outside of companies that don't choose to partner with Uber because it increases the it increases the inconvenience factor compared to the customer value proposition factor.