Uber’s surge pricing keeps drivers on road

As the Herald reported, state regulators are investigating whether ride-hailing service company Uber illegally jackedup rates with surge pricing in violation of state law during the nor’easter in early March.

The Department of Public Utilities is on the case and has asked Uber for all sorts of records pertaining to that period.

DPU said it sent Uber a notice when the state of emergency was declared by Gov. Charlie Baker during that storm. In it, they were told to suspend surge pricing.

Uber contends that it was not in violation of state law, saying it is not prohibited from surge pricing during states of emergency. It claims that only the “base-rate” of rides cannot be raised in such situations.

Either way, the hassling of the innovative livery service continues.

Lawmakers are happy to pounce on Uber about its surge pricing. It’s an easy win. The company desperately wants to operate within the commonwealth and no one likes to feel price-gouged.

Let’s note: The Uber app displays the price up front and users are free to decline the offer.

The truth is that surge pricing can be lucrative for drivers so they’ll hit the streets, travel to a distant area and even brave a nor’easter to enjoy the bump in fare.

In a 2014 case study, Chris Nosko, an economics professor at the University of Chicago Booth School of Business, and a couple of Uber techies found that on a night after a big pop concert in New York City, the effect of surge pricing was the doubling of the number of drivers on scene.

Riders understandably despise surge pricing, especially when compared to the usually inexpensive fares that pop up on their smartphones. They are suspicious of the algorithm and are peeved that the surge always occurs during some kind of “crunch time.”

But riders also love Uber and for many it is unbelievable to think there was a time when they traveled at the mercy of taxi cabs.

It is the province of our state government to ensure that businesses do not conduct themselves illegally and those businesses must not betray the public trust. We can agree on that.

Technological innovation is a blessing. We live in a golden age and it’s only getting better. Let’s not ruin a good thing.