Uber Technologies Inc., the car-sharing service that lets people order transportation via a smartphone, is temporarily cutting fares on its taxi-like option to increase competition with New York City cab services.

The start-up reduced fares 20 percent in New York for its UberX service, making it cheaper than a taxi, the company said Monday on its website. An UberX ride from Grand Central Station to the Financial District would cost $22 under the new fares, compared with $24 for a taxi, Uber said. The lower prices will be in place for a limited time.

Uber, which last month raised $1.2 billion at a valuation of about $17 billion - more than car-rental service Hertz Global Holdings Inc. or retailer Best Buy Co. - has faced regulatory hurdles involving safety concerns and protests by taxi drivers' lobbies in the United States and abroad. Traditional cabdrivers worldwide say they are bound by rules that do not apply to Uber's smartphone-based service, putting them at a disadvantage.

"New York is Uber's biggest market, and we're growing fast, but we always hear, 'I like Uber, it's convenient, but a taxi is still the best deal,' " said Josh Mohrer, Uber's general manager for New York. "It's always been a goal of ours to be cheaper than taxis."

The San Francisco-based start-up is using the slower summer months to experiment with lower fares to compete with traditional yellow cabs, Mohrer said. While there have been price cuts on UberX services in other cities, this is the first in New York. If more people are using the service at the reduced fares, then pricing will stay at the new level, he said.

UberX is the lowest-priced service offered by the company, which provides a range of vehicles such as town cars and limousines. UberX's service in New York isn't a ride-sharing program like in other U.S. locations - drivers in New York City have a taxi license and follow a more traditional commercial model.

Over the Fourth of July weekend, Uber also provided helicopter service to the Hamptons from New York city for $2,500 for five people, Mohrer said.

Unlike taxis' fixed fares, Uber's prices change depending on demand. When supply is high, Uber can cost half as much as a regular taxi or black car service, while when demand peaks Uber's pricing can be twice as high.

Uber will keep 20 percent commission for each ride, and drivers will make less per trip, though they should see more riders in a day, Mohrer said. In all other cities where Uber has initiated price cuts for UberX, trips per hour have increased, he said.