i would never undercut, (well it depends on how you look at it), i was asked by one of the woman on the street that i know how much i would charge to do her windows, i told her and she said she wanted me to clean them as she had just got rid of hers cos he was charging nearly double what i do. He hasnt been doing them for long but not only doe he charge a fortune but he i also unreliable.
Undercutting to me is knowing how much he is charging and deliberatly going in less, i never ask how much someone else charges as i have my price that i work to and i know how much i need to earn to make my money, i stick to this and im honest about my work and bloody good at it as well. If i think i am charging to little/much then i have a word with the custy and readjust the price, to this day i have never had a complaint about this way of pricing, if anything i get more work because of my honesty.
If someone else wants to charge silly money then he will only lose out in the long run
ste