Will Everyone Please Shut Up About Uber Surge Pricing?

No one is forcing you to use the service. Don’t like it? Take a cab. Or public transportation. Or walk.

uber-surge-pricing

There has been a whole lot of griping lately over Uber surge pricing, which basically boils down to higher rates at times if you use the popular app-based car service.

On Monday, Philebrity ran an item about a one-mile Uber ride in Philadelphia that cost $75. On Tuesday, Philly.com proclaimed “Uber’s ‘surge pricing’ hits Philadelphia” (even though it’s been here for a while), and Gawker told a terrifying tale of a $357 Uber ride in Los Angeles. The Uber surge pricing has been characterized as a “ripoff” and as “price gouging.” But it is neither.




I first experienced Uber surge pricing a couple of years ago in Washington D.C. I had attended a Saturday-night play in Georgetown and needed to get back to the house where I was staying, and so I pulled out my phone and summoned the Uber app. But when the app promptly told me that Uber surge pricing was in effect and that my ride would cost more than two times the normal rate, I decided to hail a cab instead.

Then a few months ago, I encountered Uber surge pricing again after leaving a concert in the suburbs of Philadelphia. It was a rainy Saturday night and Uber surge pricing was active, according to my app. But I decided to bite the bullet instead of waiting for an unpredictable cab to show up or dealing with public transportation. The Uber ride would have normally cost me $35, but on this particular night, it cost me $70, thanks to the Uber surge pricing.

What's common about both of those experiences is that Uber told me very clearly that surge pricing was in effect before I agreed to the transaction, before a car was dispatched. The app made me agree to the price increase before I could accept the ride.

uber-surge-pricing-3I could have used the Uber Fare Estimator (left) that's built into the app to calculate an estimated price based on surge pricing. Uber even prompts riders to input the "surge multiplier" that it just told you (e.g. 2x, 2.5x, 3x, etc.) once the surge hits a certain level (in Philadelphia, that threshold is 2x.), the idea being that if you're drunk at 2 a.m, Uber wants to make sure that you're cognizant enough to understand what you're getting yourself into.

In other words, Uber does plenty to alert riders to the surge pricing. There are no surprises here, or at least there shouldn't be if you're paying attention.

The guy who paid $75 for a one-mile ride wasn't scammed or ripped off. He was just dumb. The minimum fare in Philadelphia for an Uber SUV is $25. If 3x Uber surge pricing is in effect (as it apparently was last weekend), that minimum becomes $75, whether you are traveling one mile or one block. And that $357 L.A. ride makes perfect sense when you consider the distance (14 miles), time (50 minutes) and the surge rate of 3.75x. A normally $95.20 ride becomes $357. It's just math.

"We are laser focused on having cars available when people need us," says Uber spokesperson Nairi Hourdajian. "The alternative would be that we don't have any cars available." Uber has explained that their surge pricing is set by an algorithm that monitors supply and demand and that the increased rates encourage their drivers to get on the streets during busy nights and bad weather. Some people have called bullshit on Uber's claim.

But none of that really matters. Uber is a luxury service. Uber is a convenience. It's not some unalienable right. If it's a snowy Saturday night and you really want to take a comfortable sedan or SUV driven by a professional, uniformed, not-at-all-smelly driver who will probably offer you a bottle of water and assistance in and out of the car, you're going to have to pay for it. Or, just wait for a cab. Or take a bus. Or walk. It's your choice.

Follow @VictorFiorillo on Twitter.

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  • http://www.louperseghin.com/ Lou Perseghin

    Everything about this is accurate. Not much more than a year ago Uber wasn’t even an option, and now it’s supposed to be a right?

    • pitbullstew

      I guess you havent read the 1st thing about consumer laws and price gouging huh?

  • TAXI GUEST

    YOU DO REALIZE THE SMELLY DRIVERS YOU SPEAK OF ARE EX- CAB DRIVERS- MAKING MORE MONEY WILL NOT CHANGE THEIR HYGENE HABITS…

    • vfiorillo

      TURN OFF YOUR CAPS LOCK.

    • Fahad Saeed

      Incorrect – I’m a professional working in my career (computer developer) and do Uber on my spare time. So no – Uber isn’t just “EX-CAB DRIVERS”, and if you don’t like a drivers hygiene, rate them low and they will eventually be kicked off the system.

      FYI – I know many other drivers who also are NOT taxi driver driving their own ride.

    • connie delury

      The difference is that someone at UBER demands that their employees be clean, uniformed, and polite; no such thing in the taxi cab world.

      • pitbullstew

        sounds like you are race baitng and immigrant bashing of the worst kind going on here if you ask me.

        • j2k

          when did anyone say anything about race or immigrants? regardless of race i have taken uber and cabs and prefer uber any day. cabbies are smellier and ruder.

  • Kevin

    Yes, but Uber’s whole goal is to run taxis out of business… so the “take a cab” option, if Uber has their way, will eventually go away. This sort of thing is EXACTLY why people who are skeptical of Uber feel that way. With no regulations, they can do whatever they want… Taxis have customer safeguards in place. Uber does not. Trusting 100% in the free market leads to this kind of stuff.

    • Annie

      Taxis allegedly have customer safeguards in place, but I can’t even count how many times I’ve had issues with taxi drivers due to them taking the wrong streets or threatening me when I want to pay with my card. And reporting them does absolutely nothing. I don’t often Uber due to the cost, but you definitely get what you pay for.

    • Yellow cabs need a clean up

      Yellow cab drivers in inner cities have been forced to clean up there acts and cars with uber comparison out there now, yellow cabs were always dirty, most drivers looked worn out unshaven cars have like 300,000 hard miles on them . The cab culture always had a seedy flavor to it. Hence the black car industry profited from those who do to enjoy rides in bacteria infested seedy yellow cabs . Now uber has came and given the industry a wake up call either way as a rider we benefit from competition !!!!!! So compete on boys may the best man win

  • joe blow

    Uber is a trendy way to rip people off. Like Urban Outfitters cashing in on hipsters.

    • pitbullstew

      ubers days are numbered and they know it,Columbus, Dallas, Houston, Austin, Chicago, Milwaukee, Philly, Los Angeles, SFO, Seattle, Atlanta, Miami, Portland, NOLA, every where you look cities counties and states are on to them, all they ever had to do was go through the background checks and drug screens, get commercial livery insurance and apply for permits to be compliant, boy are they in for a cold sop wake up!!!

      Every week now we read of uber drivers who had felony convictions yet were on the streets driving, Friday the Chicago Tribune called their BS for what it is when they revealed that Uber would not release names, instead the TRib did their thing and in no time found a career criminal, but wait! thers more, same deal in SFO, in DC another was accused of rape, in yet another excample a driver locked his passengers in the car refusing to unlock the doors!

      But who will be the fall guys? the people who signed on down in the streets who got caught without all of the above thats who.

      • Build a bridge grow up

        Uber will only become TLC complaint as they did in NYC . Uber is pretty much here to stay I would say just like Facebook . They may have to fine tune the wheels but they have reinvented the transportation industry as we know it. To me if a need a car don’t wont to wait and want it fast . Then I’m willing to pay. Yellow cabs are vomit infested drunk ferries I. Wouldn’t sit on the seat in fear of catching something

    • Ya ya I know

      Your kidding Starbucks rips off hipsters with a $6 latte,but yet hipsters line up at coffee houses to get robbed !!!!!!! Why is it hipsters only complain about price when it comes to paying for a service like transportation or plumbing. It’s the me me me me generation . Hipsters spend crazy money for eat and drink and there pleasure but have a hard time swallowing the price for a service they can’t brag about to there friends.

  • Rashad Johnson

    Do yourself a favor if you live in the City get friendly with a cabbie he may be an independent driver or know of one you can call when going out to meet you at specific times :)

    • pitbullstew

      exactly Rashad good point

  • LA Commuter

    I experienced the Uber surge pricing this past weekend while in San Francisco. It was on Saturday at about 4:30 p.m.. This was my first time using Uber, which I agreed to do at a friend’s urging. I was asked to accept 1.75 X normal rates. First of all, there were several cars near me and available to pick me up. So I don’t buy into Uber’s claims that the surge pricing is designed to get Uber drivers on the road during poor weather or at times when they would rather not be on the roads. There is absolute no truth to this. So I went ahead and accepted the slightly higher rate thinking it would still be reasonable as my destination was 2.5 miles away. However, what I did not expect is for the driver to exploit this higher rate by taking the worst route possible. Thanks to driver’s decision to select the most congested street,our trip of 2.5 miles took 30 minutes to complete and cost me $55. In retrospect, I should have opted to walk. It would have been quicker.

    On a separate note, to those who think that Uber is a better option than taking a taxi, here is some food for thought. First, unlike taxi cabs which are heavily regulated here in LA (drivers are required to go through criminal background checks, drug tests and new applicants are disqualified if they have certain felony convictions), Uber drivers do not go through a rigorous screening process. Ironically, Uber drivers are likely ex-cab drivers who are fired or are no longer qualified to drive a cab due to a conviction. Moreover, whereas taxi cabs go through regular maintenance and are inspected, and are fully insured up to $1,000,000, the Uber vehicles are owned by the individual drivers and likely are not inspected for mechanical issues. The biggest difference, however, is that Uber does not own or insure the vehicles that you are riding in. So guess what, the vehicle may or may not be insured, and if it is insured, it likely has a standard automobile policy which does not provide coverage if the vehicle is used “for hire”. So if you were to be involved in an accident and suffered injuries, good luck getting your medical bills paid or a monetary settlement. And think twice before trying to go after Uber itself to collect. Here is an excerpt of Uber’s liability disclaimer:

    “The quality of the transportation services requested through the use of the Application or the Service is entirely the responsibility of the Transportation Provider who ultimately provides such transportation services to you. Uber under no circumstance accepts liability in connection with and/or arising from the transportation services provided by the Transportation Provider or any acts, action, behaviour, conduct, and/or negligence on the part of the Transportation Provider. Any complaints about the transportation services provided by the Transportation Provider should therefore be submitted to the Transportation Provider.”

  • Lucie

    I was bringing my elderly mother home from cancer treatments at Sloan Kettering and had to pay $90 in NY on Saturday because there were no cabs available, the sidewalks were a serious hazard for her (we nearly slipped and fell several times), and walking several blocks to a subway wasn’t an option. We were happy to see uber under the circumstances, so we appreciate the availability. But the price was hard for both of us to pay. Those who say, “if you don’t like it, walk” are speaking from a position of safety and good health and clearly have no idea that there are people in more difficult circumstances. My friend just got taken advantage of by her company in having to do unpaid overtime because she needed the money. We had to pay the price because we had to have the service. That doesn’t make it fair or right.

    • PAPlan

      But it is a private company and they have to maximize their profits or they won’t exist. What did you do (last year) before they didn’t exist?

      • pitbullstew

        can you spell price gouging?

        • j2k

          pitbull if you dont like it dont use it! why do you hate so much. i always found it to be convenient, even during surge pricing. on nye i waited in the rain 4 minutes for a driver during surge time and pitied the poor girls in their tiny outfits who had never heard of uber. i went home in a car with heated seats and was allowed to pick the temp. my driver and i chatted about the nutty revellers he saw and that was that. 2.2 x surge came up twice on my phone and i accepted

    • freemkt

      Taking Uber is not a right. quit complaining

      • pitbullstew

        how ever price gouging is a matter that is subject to consumer affairs laws isnt it

    • pitbullstew

      if uber were actually compliant to existing livery regs they could not have charged that kind of money to begin with and BTW? they are NOT ADA (americans with disabilities act compliant) try booking a handicap vehicle and get back here with the @truthaboutuber on twitter. and besides they do NOT have livery insurance, they are perping a fraud there on a nationwide scale

  • AG

    Paid surge pricing Saturday night coming home from Christmas party. I have no problem with it and understand why über implements surge pricing. I did ask my driver if he was busy when he picked me up and he did say it has been dead lately. I mentioned it to uber and they promptly took care of it. Great service and worth the little extra for a comfortable, clean, and safe ride.

    • pitbullstew

      higwash AG I call BS on you on that one

  • Joey Willoughby

    You don’t need electricity, but of the electric company started charging $100 a watt during the winter and said if you don’t like go build a fire, you’d say they were ripping you off. If grocery stores stared charging $200 for water during a power outage and told you if you don’t like it you can go down to the lake and get your own water, you’d say they were ripping you off. Same thing applies here. $357 for 14 miles is not ok under any circumstances. They are taking advantage of the fact they pretty much have a monopoly on a product and taking advantage of it. I understand the idea of surge pricing and agree with it, but they are abusing it and charging way too much.I guarantee you another company will come in next year offering the same product for cheaper, which will force them to lower their surge pricing as well

    • Mark

      Joey,
      The people who paid $357 for a ride agreed to the amount. No one was ripped off! They could have called a cab or a limo service. They could have taken the bus. If surge pricing was in effect it probably would have taken hours to get a cab to come pick them up. They probably had no idea how to take a bus and a limo service would have laughed at them and said will pick you up in 4 hours. The could have called friends…instead they agreed to use Uber and agreed to pay for it. If think it can be done for cheaper and be just as convenient go start your own company!

  • NYC uber rider

    To clear the air UBER drivers in NYC are fully licensed by the TLC commission ,they have been drug tested back round checked . NYC uber vehicles are licensed by the TLC commission , inspected and carry commercial insurance they also sport TLC lichen plates tags and stickers . They must meet rigorous testing standards . Don’t know about the rest of the country . But NYC uber is fully TLC compliant commercially insured ,and safe as can be. Ride on folks