Uber Agrees to End Surge Pricing During NY Emergencies, And Why That Means You’ll Never Find a...

Discussion in 'Blogstand' started by BoardingArea, Jul 8, 2014.  |  Print Topic

  1. BoardingArea

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    Lucky recently wrote about Uber’s fixed rate pricing for airport runs and some of the rates are pretty good.

    For instance, 550 baht for airport to downtown in Bangkok. The Airports of Thailand service will set you back 1000 baht. (It’s still 2.5x the price of a taxi.)

    I think that £37 for London Heathrow to downtown with UberX and £60 with UberBlack is a pretty good deal, since a taxi can be as high as £80.

    There are cheaper ways to do it, but the pricing is pretty good for what you get.

    In his post, Lucky offered as an aside,


    There are some fair complaints about Uber’s surge pricing..

    And I replied in the comments,


    No, there really aren’t.

    1. Surge pricing is disclosed clearly in advance. You can take them up on it or not.

    2. It’s only during times of scarcity. And Uber isn’t keeping most of it (their percentage cut remains the same). It brings out drivers who would otherwise stay home or go home.

    I’ve arrived at Penn Station in New York at 4pm on a Friday. Shift change. It’s raining. Cab line an hour long. Destination not convenient to subway. Will I pay 1.5x and have a ride right away? Darned straight. Better than not having a ride at all, or waiting an hour.

    Is it better for everyone? No. The higher price suppresses demand as well.

    But it encourages drivers who might have gone off shift to work a little while longer while demand is high.

    Or during a snowstorm, gosh it’s just easier to stay warm and inside but they’ll come out and take people where they need to go for a higher fare. The regulated fare system doesn’t allow it, and creates shortages at key times.

    Surge pricing isn’t just defensible, it’s actually brilliant, and I’m sick of listening to people complain about something that provides rides when without the system there wouldn’t be any.

    Just days later comes an announcement that Uber has entered into an agreement with New York State’s Attorney General to curtail the practice, complete with quotes suggesting that the New York settlement could become a model systemwide.

    I like Uber’s pricing transparency. Instead, though, in New York we get this government pricing formula:

    [​IMG]

    Quite simply, since Uber can’t raise its prices during emergencies they won’t be able to entice more drivers to drive and people will just be left without rides. Which is apparently considered better than letting people have rides at a price they’re willing to pay and that makes it worthwhile for drivers, too.

    (HT: Katherine Mangu-Ward)



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