Uber is innocent
Uber is receiving a lot of criticism for the rates it charged on Halloween. Users complained about paying three times the normal rate or more as they made their way home after a night of celebrating. Many people feel that Uber has taken advantage of them.
Charges of hundreds of dollars have been reported and numerous complaints submitted to Uber. One man reported being charged $539 for an 18-mile trip. Another woman claims she was charged $362 for a 20-minute ride.
Personally, I do not know what is so frustrating about being charged more for a product that is in high demand. There are limited drivers and an excess of people looking for rides. It would be outrageous for Uber to charge the standard rate given such circumstances. From an economic standpoint they are innocent.
The prices are easily justifiable. The company uses a simple calculation to determine the surge pricing, increasing fares in order to reduce demand during times of increased user activity.
From a moral standpoint I think the company is innocent as well, despite complaints that Uber took advantage of its customers. After all, users had to tap through a series of notifications that warned them of the surge pricing. Before requesting the ride, the user even has to type in the amount the standard fare will be multiplied by.
Uber anticipated a user backlash from the charges and did what they could to make users aware of the high prices. The app allows users to request a notification when the prices decrease and offers an estimate of when that will be.
The surge pricing is made unmistakably clear.
Of course, the prices are inconvenient and easy to complain about. But, the beauty of a free market is that options are available. Users could have checked Lyft prices or even have taken a traditional taxi home, a surefire way to get a better deal. No one was forced to take an Uber.
The outrageous $362 and $539 fares seem to me to be a result of irresponsible users.
Upon seeing the surge pricing of 250 percent, I simply waited. In a few minutes the surge pricing dropped to 150 percent, just like the app said it would. I managed to get two trips that night for under $40, about half the price a friend paid to travel half the distance. Other friends chose to take traditional taxis and saved as well.
I think that over time, as the market for ride-sharing services becomes more popular, prices will decrease. As people become aware of cheaper alternatives, competition will drive prices near the level of traditional taxis.