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Johannesburg - More Fin24 users have responded to internet ride sharing app Uber’s surge pricing model by calling the practice a “rip-off”.
Ahead of New Year’s Eve celebrations, Uber this month has put forward its explanation for how its dynamic or surge pricing model works.
Uber’s dynamic pricing model incentivises its partner-drivers to pick up passengers during peak periods such as New Year’s Eve by hiking fares, sometimes by several factors.
And explaining how this model works, Uber said in a statement that because it doesn’t employ drivers, but rather partners with them, incentives are in place to provide a continuous service for customers.
READ: Uber explains surge pricing ahead of NYE
“The dynamic pricing algorithm automatically increases prices to encourage more drivers to come onto the platform and to cater for the demand. When demand and supply are in line, prices quickly return to normal – and riders can continue to rely on a safe, hassle-free transportation option. During times of crisis or disaster, Uber works quickly to ensure dynamic pricing is deactivated,” said the company this month.
Uber further said it communicates its dynamic pricing “repeatedly” to users and requires confirmation from users before they start their trips during these peak periods. Uber added that riders can obtain a fare estimate before starting their trips, and that they can split fares with friends to share the cost.
WATCH: Uber explains its surge pricing.
Surge pricing under the spotlight
But Uber’s surge pricing particularly comes under focus during busy periods such as New Year’s Eve.
In January this year, Fin24 reported about a number of disgruntled Uber customers’ complaints about surge pricing. At the time, Uber did also reimburse customers who experienced surge pricing for the first time.
READ: Uber expensive ride home angers dad & Surge pricing: Uber willing to refund new users
Despite complaints around surge pricing, Uber has experienced fast growth in South Africa where it recorded two million rides during the first half of this year. The service has further expanded to Port Elizabeth after being present in major centres Johannesburg, Pretoria, Cape Town and Durban.
READ: Uber expands to Port Elizabeth
However, Uber’s surge pricing model continues to be a sensitive topic for Uber customers as more Fin24 users have told of their issues and views of the practice.
READ: Uber's surge pricing a failed concept, say Fin24 users
Fin24 user Cheree wrote that she thinks surge pricing is a “rip-off”:
“I also had experienced this price surge two months ago and the increase was ridiculous when compared to normal pricing. I think Uber is exploiting the market, they know the demand is there and during the peak holiday season the demand is even higher. One can accept a 10- 15% increase but not a 100% or more increase. That's just a rip-off.”
Fin24 user Alwynn has also told of a feeling of being “ripped off” with surge pricing during the recent Rugby Sevens event in Cape Town: “I was in Cape Town for the Rugby Sevens and was charged R1 140 for a trip that would normally cost R300. I emailed Uber and the response was that I accepted the charges . The reason we use Uber is for convenience and I tried to explain to them that how was I meant to return the Somerset West at a normal rate. They ripped me off and will never use them again; the meter taxi would have cost me R400 which I should have done.”
Fin24 user Alwynn emailed this screen-grab of the surge pricing he experienced recently.
Fin24 user Tony had this to say about surge pricing:
“They cannot expect clients to use them all year round.... And then rip them off on major holidays. I won't be using Uber.”
Another Fin24 user Tyla told of a surge pricing experience during last year’s New Year’s Eve celebrations:
“Last year on New Year's Eve , under the influence of alcohol I accepted the surge charge of 12 times the price - but regardless of alcohol , I was charged R2 800 from Clifton to Llandudno in Cape Town which is roughly a 7-9km trip , we managed to get about half of the money deducted after MONTHS of fighting with Uber as regardless of anything it is absolutely CRAZY to charge that much - I always loved Uber and it was convenient but since then I refuse to use it as I will not support a company who can rip of their customers like such.”
Finally, Fin24 user ‘Bggl’ said surge pricing is fair as it forms part of a normal supply and demand model:
“If I was an Uber driver I would also charge a hell of a lot when I give up my own celebrations with my family and friends to take a drunk home. The economist Adam Smith called it supply and demand. Stop whinging, stay sober and drive yourself home.”
Disclaimer: All articles and letters published on Fin24 have been independently written by members of the Fin24 community. The views of users published on Fin24 are therefore their own and do not necessarily represent those of Fin24.
