Uber’s surge pricing policy hit the headlines again this week when fares in London trebled during a 24-hour strike by subway drivers that left millions looking for alternative ways to get to and from work.
Fare prices with Uber’s app-based ride-hailing service rise with demand, and so with all of the U.K. capital’s tube lines closed, fares during the morning and evening rush hours shot up.
While critics claimed the higher “surge fares” exploited the travel misery of Londoners, Uber insists the system actually benefits customers as it encourages more of its drivers to hit the road and offer rides. Of course, it also benefits Uber, which takes a 20 percent cut of each fare.
The U.K.’s Licensed Taxi Drivers Association, which represents nearly half of those who drive the city’s iconic black cabs – many of whom have joined protests against Uber – told the Guardian this week that if the ride-hailing service “achieves its goal of market domination by forcing their competitors out of the market….today’s prices and experiences will become the norm.”
The transport strike, called in connection with a planned all-night tube service, is exactly the kind of event that sends Uber prices skyward.
In a message posted just before the industrial action kicked off on Wednesday, the company encouraged its customers to share an Uber ride with other passengers in order to reduce the fare and free up other cars during the busy period.
Surge pricing
Explaining surge pricing on its website, Uber says it aims to be as reliable as possible in connecting riders with drivers.
“At times of high demand, the number of drivers we can connect you with becomes limited,” the San Francisco-based company says. “As a result, prices increase to encourage more drivers to become available.”
It should be noted that Uber always informs customers of the estimated fare before they request a ride.
When surge pricing is in effect, the rider has to tap a button that says, “I accept the higher fare,” ensuring there’s no confusion about the deal. And if the rate is more than double the usual fare, as it was in London this week, the rider has to type the estimated fare into a text box to show they fully understand what they’re expected to pay.
