How does Uber Surge Pricing Work?
- According to Uber, rates increase to ensure reliability when demand cannot be met by the number of drivers on the road.
- Uber's goal is to be as reliable as possible in connecting you with a driver whenever you need one. At times of high demand, the number of drivers they can connect you with becomes limited. As a result, prices increase to encourage more drivers to become available.
- According to their website they take notifying you of the current pricing seriously. To that end, you’ll see a notification screen in your app whenever there is surge pricing. You’ll have to accept those higher rates before we connect you to a driver.
Why are customers unhappy with Uber's pricing?
- The ride-sharing company has been faced with reoccurring issues with their “surge pricing.” People have been charged outrageous amounts of money for a seemingly cheaper alternative to a cab fare.
- This video shows a local San Diego woman being caught off guard with Uber's surge pricing. She took a 2.7 mile ride, which normally costs $7, but because of Uber's dynamic pricing it ended up costing her $92. She explained that this car ride, that was 13 times the normal rate, costed her the same amount as a flight to San Francisco.
- The screenshot below is the Uber fare receipt of another peeved, loyal Uber user who was traveling home from the Texas Bowl at NRG Stadium.
- This ride would normally of be about a $45 ride, with the various fees and taxes. But because he and his group of friends were leaving at the end of the game, around 11 p.m. during Uber surge pricing he and his friends were stuck with a bill of $241.69.
- This article by Business Insider, throughly displays record breaking costs caused by Uber's surge pricing. With the highest recorded Uber surge price being at about $57 per minute documented by a user in Sweden.
Is This The Highest Surge Price Ever Recorded In Uber History?Surge pricing is Economics 101, mobile ride-hailing company Uber preaches. If you want supply to keep up with increasing demand, you need to encourage drivers to get on the road and come pick you up. "By *raising* the price you *increase* the number of cars on the road and maximize the number of safe convenient rides," Uber explained in a blog post on surge pricing.Unreasonable Prices During Natural Disasters & Emergencies
- The company Uber was noted to use their surge pricing, by charging their customers 2 times the normal rate during Hurricane Sandy, which received a lot of criticism and backlash. And according to an article in Fortune Magazine, they responded to the criticism by paying the drivers 2 times the normal rate, but only charging the riders the normal rate. This costed Uber about $100,000 a day.
Uber NYC and the Sandy SurgeWhile my hometown of New York City recovers from the aftermath of Hurricane Sandy, there's been a different verbal maelstrom here in Silicon Valley: The question of whether Uber NYC's "surge pricing" is gouging or simply an effort to balance supply and demand. Uber's an algorithm-driven company which responds to emotion with facts.Putting a Price Cap onto Uber's Pricing
- Since Uber does not have a cap for their dynamic pricing it allows them with the potential to charge their customers up to 900% when the supply of drivers does not meet the demand of drivers. These numbers are simply not fair for their customers.
Uber's Surge Pricing Affecting Customers
Will a cap on Uber's dynamic-pricing model allow riders to keep more money in their pockets?
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