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Uber to refund #GlobalCitizen hiked fares, but surge pricing here to stay

Dec 04 2018 17:11
Tehillah Niselow

Uber will refund fares to Global Citizen concert-goers who were affected by surge or "dynamic" pricing outside FNB stadium near Soweto on Sunday night, after the e-hailing service initially promised to keep fares steady despite heightened demand.

An Uber pickup zone had been set up, which was supposed to act as a safe and designated area for riders to be fetched and dropped off. Wi-fi and charging areas were also available.

But social media users on Sunday night shared screenshots of Uber fares of more than R1 000, while others were unable to connect with drivers.

Alon Lits, general manager of Uber sub-Saharan Africa, told Fin24 in an interview on Tuesday that the company's ability to deliver was "dependent on the event", because Uber is "reliant on the event organisers [and] whoever is in charge of traffic flow to that pickup point".

He said it appeared that several barriers were knocked over on Sunday night, blocking road access to the pickup zone, and traffic authorities should have rectified the situation to improve traffic flow. People using their own cars and shuttles were also affected, Lits said.

Had to implement surge pricing

"What we saw happen [was that] there was a great demand for people wanting to leave, and drivers ... [did not want] to come back or do trips from the area, because why should they wait three hours to do one trip?" he said.

Imposing surge pricing is visible in the app to drivers, and encourages more of them to go to areas they might otherwise avoid, he added.

"We took that decision to get more supply into the area, and it did result in some people paying higher amounts for trips, but at least they got home," Lits explained.

He added that because they promised they would not implement surge pricing, Uber will refund people’s entire fare, not just the surge portion.

The company will absorb this cost while drivers will be paid their fees.

"In essence, if you left after 11pm on Sunday night, you will not be charged for that trip," he said.

Lits said people who were unable to reach riders from the app would be offered Uber credits. This was made known to users on Sunday night.

Festive season surge pricing

Lits, however, made it clear that the e-hailing app would continue to make use of surge pricing during busy periods.

"We’d rather give people that option to ride, and it reacts to demand and supply. Drivers also have a lot of things they could be doing on New Year’s Eve. They might want to spend time with their family …or do private trips. We need to make sure drivers are also incentivised to come and ride," Lits said.

He added that unlike the hotel industry and restaurants, which automatically charge high prices on New Year’s Eve, Uber fares will only increase if demand in an area is high.  

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uber  |  e-hailing  |  global citizen
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