Uber, market leader with a variety of ride services available
via smartphone app, has gotten a surge of bad publicity lately over
its “surge pricing” policies–a (much) higher surcharge over
typical fares. It hikes prices during bad snowstorms, and pissed off
New Yorkers for it, with a $94 fare for a two mile, 11 minute
trip over this snowy weekend. It also does so during rush hour, and
pissed off an Angeleno for it with a $357 fare for a 14
mile, 49 minute trip.
Company policy is to inform riders that surge pricing is in
effect before rides are taken, though in the case of the L.A. fare
mentioned above, the passenger claims she wasn’t warned–a claim
Uber disputes. Since Uber drivers only work when they decide they
want to work, the surge pricing is largely designed, Uber claims,
to keep drivers on the road during times when they might be likely
to think the standard fares aren’t worth the trouble for them.
It’s an attempt to adjust supply to demand under changing
circumstances. It will doubtless never satisfy everyone and for
sure is going to result in retroactive regret on the part of some
passengers, which isn’t good for Uber. It’s especially not good
when it becomes a national Internet meme about how awful your
That said, Michael Hiltzik at the Los Angeles Times
hits on what will likely be the thing to “discipline” Uber if
it needs discipline: competition:
One other factor tends to limit gouging: fear of consumer
a fear Uber hasn’t yet acquired, perhaps because it doesn’t
think it needs to. At the moment it’s the big cheese in
ride-sharing and its typical clients can afford to shoulder the
surge (or charge it to their expense accounts), griping all the
way. But what happens when its reputation for caring nothing about
customer relations starts biting back, as it surely will some day?
There’s always room for a rival billing itself as a “kinder,
gentler Uber,” and this weekend may just have given some clever
entrepreneur an idea.
I wrote about Uber and other such e-hailing services upending
the hired driving industry back in October as California became
the first state to try to regulate them.
Reason TV on Uber and other ride services v. city
from Hit & Run http://reason.com/blog/2013/12/17/uber-e-hailing-ride-service-accused-of-g