Uber’s surge pricing ‘a failed concept’, Fin24 users say

Johannesburg - In reaction to internet ride-sharing app Uber’s explanation of its dynamic or ‘surge’ pricing concept, Fin24 users have responded with criticism.

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.

However, the model came under scrutiny during the New Year’s Eve period last year when some South African customers said they had to fork out thousands of rands because of peak demand. One fed up father last year complained after Uber charged his son R2 800 for a 35km trip from Clifton to Muizenberg on New Year’s Eve.

READ: Uber expensive ride home angers dad

In a bid to then educate local Uber users on surge pricing, the internet ride-sharing company has released a statement telling customers about its dynamic model works.

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 in its statement.

Uber further said that it communicates its dynamic pricing “repeatedly” to users and requires confirmation from users before they start their trips during these peak periods.

To avoid being surprised by surge pricing, Uber further said that riders can obtain a fare estimate before starting their trips. Uber has further urged riders to split fares with friends and share rides. Uber also said that its users have “multiple opportunities to choose, confirm and accept increased fares or opt to be notified when prices drop”.

Users respond

In a voting poll on News24, only 10% of users voted that they would use Uber on New Year's Eve in light of the surge charge. Meanwhile, 54% of respondents said that they would not be using Uber this New Year's Eve and 36% said they would be using their own transport.

Meanwhile, Fin24 users have responded to Uber’s explanation around surge pricing in emailed letters as well.

Fin24 user Peter described surge pricing as a failed concept.

“We will  use normal taxis during peak times... not Uber. Their policy of increasing price to get their drivers to work is a failed concept... we have choice on our side as consumers. At least  they have been open and up front. Uber is a spectacular option in normal times.”

Fin24 user Mark said he’s not happy about surge pricing:

“Very simply you don’t know where you stand with Uber with surge pricing and one cannot budget. There is no real advance warning. An example: I recently used Uber from Kirstenhof to Cape Town Stadium for the Rugby 7's. Going there was R220.00. Great no problem. After the Rugby there was surge pricing and the return trip was being quoted at over R1200.00. Three hours later surge pricing was still in place. I caught a standard cab home for R375.00. From this point of view Uber is not for me.”

Fin24 user Hercu said he would “boycott” Uber if they continue with surge pricing.

“I was negatively affected previously and will boycott Uber in the future if they continue with this practice. This behaviour leads to the consumer being exploited where people use the service to a venue and are therefore forced to use it on the return leg later at night but at super inflated prices.”

Fin24 user Theresa said she had a bad experience with premium prices with Uber.

“I used Uber at about 10pm a week ago to go two blocks in Umhlanga. I clicked premium price and waited!!!!! It took the driver more than an hour to get to me. I kept phoning him to give him directions, he never phoned me once. He passed me three times and the reason he couldn't see me is because he was speeding so he couldn't see any signs. Eventually I ran after him in the street. He then had no idea how to use his GPS and didn't know the area. A disaster for a premium price.”

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.