Uber’s ‘dynamic pricing’
RIDE-HAILING app Uber has warned of a price surge on New Year’s Eve, saying the high demand for transport coupled with the shortage of drivers willing to work during the holiday is to blame.
Uber has been warning customers extensively through traditional and social media to expect to pay more for a ride during times of high demand. New Year’s Eve is the company’s busiest day in many countries around the world, including South Africa.
Uber users have reacted on social media, fuming about higher prices during the festive season. Frequent Uber user Mitchell Masuku said: “Uber has been extremely expensive during the festive season. I have been using Taxify instead because it’s half the price.”
Uber said this “dynamic pricing” was part of its business model and followed market principles of higher prices when demand was high. Because Uber drivers get most of the taxi fare, they are also encouraged to work during such times as they earn more. In turn, this makes more drivers available for customer convenience.
Uber spokesperson Samantha Allenberg likened the pricing to that of hotels and airlines, which charged more during peak season. In 2015, a Cape Town father cried foul after Uber charged his son R2800 for a 35km trip from Clifton to Muizenberg on New Year’s Eve – about R80 per kilometre.
An Uber ride at a non-peak time from Clifton to Muizenberg costs between R247 (R7/km) and R329 (R9.4/km) according to the Uber estimator on the app, making his New Year’s trip about 10 times the offpeak price.
“My son was not of sober mind when he accepted the price surge and was therefore not aware of the fact that he was going to have his credit card debited to the tune of R2800,” Nicky Rebelo said on Facebook. He’d suggested that his son use Uber for the first time instead of driving, thinking he was being responsible. “Uber should have revealed the full price immediately,” Rebelo said.