I was charged $143 for a 5 mile Uber ride New Years Night and I am understandably not happy about it.
I like Uber, have been a fan for quite some time, a frequent rider and a brand advocate. I am one of those people who pulls out my iPhone to show my (low tech) friends a totally cool and new way to get a ride somewhere.
But maybe not so much anymore.
I feel like Uber was deceitful and lacked transparency on this decision. Also, I think they did it on purpose to take advantage of their riders. Uber made a recent business change they call “surge pricing” which is meant to be put in place on nights where demand greatly outpaces supply. In basic terms, the more cars being hailed at a certain time leaves less cars left to pick up others.
So what to do? Uber thinks the best decision is to jack up prices. They call this a surcharge. This is the email receipt I received afterwards.
When I hear the words surcharge, I think of a $10 fee or possibly something to that extend. Uber thinks a surcharge is X times the ride amount is the appropriate way go. Although they are stating they placed notifications and alerts at the point of opening the app and standing behind their decision, I think it’s bullshit and here’s why.
I knew Uber would be more expensive New Years night. They sent an email on the 28th, stating they proposed New Years change…. but conveniently forgot to mention how much they would be increasing the rates. My feeling is they did this on purpose, knowing if riders preemptively knew they would be charged up to 5X the normal rates they wouldn’t have even considered Uber.
Heres the email content:
We’ve only been in the Emerald City for a few short months but we’re already getting your patterns down. Whether you’re headed to the latest craft cocktail bar or going back to a well loved dive, you’re zipping around in Ubers like you own this city. Now that the mother of all party nights is upon us we know you’ll have a few glasses (read: bottles) of bubbly, and the last thing you want to do is call AAA for that tow-of-shame. We’re ramping up like crazy with the sole intent of providing a safe, convenient and stylish ride for as many Seattleites as possible on New Year’s Eve.
New Year’s Eve is what we call a *surge event* at Uber. This means we expect to see a massive demand spike and a supply shortage at the same time. During these events like NYE or Halloween there is a run on private cars in most cities and in order to ensure there are enough cars on the system (read: aka an Uber experience), we’ll be enabling surge pricing on New Year’s in a similar fashion to Halloween 2011. This means that rates on New Year’s Eve will likely increase during peak times of demand BUT when demand subsides or more supply becomes available, rates will automatically drop and you will ALWAYS know if there is a price increase before you request an Uber.
Champagne wishes and Uber dreams,
As you can read, how this was to be executed and the result on me, as the rider, is not mentioned. All that was noted was that there was a possibility of an increase in rates based on increase in demand. This is not transparency. Yes, they were on the right track about notifying riders and Uber followers about the change, but the particular way they calculated and executed this was totally wrong.
Uber has stated they used a dynamic pricing structure which may have been changing by the minute. How the hell do riders know whether it’s going to be the same price or 5X the normal rates? This is exactly why Taxi rates are controlled so closely, so no one gets out of control and starts jacking riders without their knowledge. If Uber is going to cross the chasm to mainstream America they need to clean up this messy execution.
I could go on and on… but I won’t. I know I am not the only one pissed on this matter. My point is transparency is not just a vague email or a short notification at a point in time where the rider has little other choices at hand.
There’s an easy way to send a message to Uber. Call your CC company and have the charge reversed. It wasn’t a legitimate charge, and you have the right to have it refunded. Doing the right thing, you could contact Uber and offer to pay the $29 fare, but I wouldn’t go out of my way – they didn’t.
It is my understanding that Uber’s pricing is demand based. It being NYE, the demand was high.
I agree that they were certainly not as transparent as they should have been. I also suspect that they didn’t really anticipate the cost driving that high (never-seen-before levels of demand in a newer product; that can happen easily).
I think Uber should probably do two things to ameliorate the situation:
1) some sort of compensation. Maybe they refund half the cost. Maybe a free ride in the future. Something to indicate their mea culpa is sincere.
2) greater transparency about outlier pricing — if a price is 2x or greater the anticipated cost, request additional confirmation, etc.
After reading a bunch of these complaints, I can’t help but think that the charges were “valid” — in the sense that they were not artificially manipulated by any parties involved. Their pricing, after all, is demand based — and NYE is one of the highest demand nights of the year. I’m guessing that the market value for that situation is actually probably about right (given that people will pay hundreds of dollars for a NYE party ticket; a 4x limocab ride isn’t outside my sanity estimates).
But yeah, they really took a lot of people by surprise with that one.
I guess it’s sort of legitimate. You technically agreed to pay whatever they ask for. And if x5 is not an unusual practice among cab companies, they get away with it.
But fact is, the app could have notified the customers beforehand. They could have even given you a rather accurate estimate.
Things like this only work once or twice. Negative marketing effects will take care of it. Like Netflix.
According to this blog post, you and everyone else *were* alerted about the exact multiplier prior to hailing a car: http://startingup.me/post/15141134089/redesigning-the-uber-surge-pricing-screen
Curious as to whether or not you saw that screen?
Also, although Uber could have done a much better job of communicating, I don’t think that their pricing model for surge events is the wrong way to do it. On the contrary I think it’s quite smart. Here’s a breakdown of logic behind it: http://www.quora.com/What-happened-with-Uber-on-New-Years-Eve
I had an issue where I logged into the app and saw the multiplier (3x) and decided to wait and see if demand went down. A half hour later or so, I logged in again and didn’t see a popup so assumed the surge pricing was ended, but it was still in effect. I guess that’s my fault for assuming no popup meant “no surge” instead of “no change”, but I think they should be more clear about it in the future. I wouldn’t have booked the car knowing the multiplier was still in effect.
Good grief! Glad I stayed home with sick grandkids.
UBER, for shame, agreed, horrible decision on the surcharges … my brother and I are (were) the biggest UBER advocates and users in NYC since it started … I used them everyday, multiple times per day … since the surcharge nonsense on halloween and the decline in quality cars and even some ornary drivers … I only use UBER when I have to … our halloween surcharge was fortunately 2x … 5x is just ludicrous!