T here have been mixed reactions pertaining to the policy by Uber of implementing a practice known as surge pricing, where the cost of a hired ride increases during what are considered to be peak times — such as when bars close, a sporting event concludes, or during a holiday.
Surge pricing can be applied at times which are considered inappropriate — such as during the recent siege of a chocolate café in Sydney where three people were killed. Those who were attempting to escape from the scene by fleeing with the car service provided by Uber were initially charged greater than quadruple the typical rate. Representatives of Uber later announced that rides from the central business district would be free of charge, with refunds to be issued to those who paid the inflated rate during the surge pricing, which is implemented automatically through the use of technology.
Then again, surge pricing is “great”, according to Gary Leff, who posted that surge pricing is never a surprise; that it balances requests for rides with available rides; that more rides become available because of it; and that most of the money goes to the driver of the vehicle.
Jennifer Moody of The Jetsetter’s Homestead — who is also a driver for Uber — took exception to this article posted by Kathy of Will Run For Miles about a software application program which allows you a way to avoid surge pricing called SurgeProtector.
When you think about it, many industries have surge pricing — including the airline industry. Try booking a flight during any major holiday — such as Christmas, for example — and it is no surprise that you can find airfares priced multiple times more expensive than the typical price. That is because demand is higher due to people being off from work and schools being closed. Is that not a forum of surge pricing?
Toll roads are becoming another example. Interstate 85 north of Atlanta currently has what is known as an express lane with a variable priced tolling system. The other lanes of the highway are free of charge to use; but when there is heavy traffic in those lanes, the cost of the tolls increase accordingly in the express lane — and express lanes with a variable priced tolling system will be expanded to other highways in the greater Atlanta metropolitan area. Is a variable priced tolling system not a form of surge pricing?
As I had mentioned in previous articles, although I have yet to be a customer of Uber, I rarely patronize taxis and car services. Having been born and raised in Brooklyn, I have always despised toll roads and bridges — especially electronic toll roads — and there were plenty of them in the northeastern United States. I usually try to avoid them whenever possible, which is difficult to do in New Jersey if you want to travel on a highway going north or south, as an example. Typically, your choices are either the New Jersey Turnpike or the Garden State Parkway — both of which are toll roads — but while it is certainly possible to take alternate routes, they are usually not nearly as convenient. At least in south Florida, you can choose between Interstate 95 and Florida’s Turnpike much more easily.
The point is that I am not the target for toll operators; and I am definitely not the target market for surge pricing for most companies in most industries — and that is all right as long as reasonable alternatives are available to me.
Despite what I have written in past articles, I am not an opponent of surge pricing — as long as consumers have reasonably valid choices. It is a product of the free market which is based on the simple economic principle of supply and demand. When there is more demand for a product or service, the price increases. When demand decreases, so does the price.
What I oppose is when surge pricing is activated inappropriately; or specifically designed to purposely take unfair advantage of customers — especially in situations where they have little to no choice. While that initially seemed to be the case in Sydney, the surge pricing actually automatically goes into effect due to technology which activates it when demand increases — but in turn, it resulted in the latest in a string of bad public relations for Uber to which Uber corrected in response. To be clear, the surge pricing of Uber is not one of those examples of unfairly taking advantage of customers. You can instead take a more traditional taxi cab. You can take a bus or a train. You can drive your own car. You can ride a bicycle or a skateboard. You can walk. There are options…
…and in my opinion, there is nothing wrong with having an option to avoid surge pricing if you still want to patronize Uber for your transportation needs — as long as you use that technology correctly. I agree with Jennifer Moody that abuse of avoiding Uber surge pricing by intentionally deceiving drivers that you are located outside of a surge pricing zone which is in effect at that time — only to inform the driver afterwards that you are actually located in that zone and not paying the extra money — is wholly unfair to the driver. As Gary Leff pointed out, most of the money goes to the driver of the vehicle and not to Uber.
However, I do not believe that Kathy was attempting to help her readers defraud Uber and its drivers. Rather, I believe that she was simply attempting to help her readers who use the Uber car service to save money. Although it may be a little inconvenient, what is wrong with knowing where the closest location outside of the surge pricing zone is in order to save money if you actually meet the driver at that location? Not everyone is going to use it; but it is a viable alternative for the consumer — as long as that choice is not abused, as noted in detail by Jennifer Moody…
…and a poll at the end of her article indicates that 73 percent of her readers so far believe that use of the SurgeProtector software application program is committing fraud. Do you agree?
As I said, I am not against surge pricing in any industry — as long as there are reasonable alternative choices and it is activated appropriately. Sometimes the surge pricing is the best value; and at other times, it is not. Some people will choose to pay surge pricing all of the time; others will always refuse to pay it — no matter what, in either case. There will be customers who use surge pricing some of the time to various degrees; and at other times not use it. As long as the consumer — and not the business or government entity — has the power to choose legally available options without purposely and intentionally attempting to deceive said entity, all is good, in my opinion.
In other words: as long as there is nothing unethical about either the practice of surge pricing by an entity or about avoiding surge pricing by the consumer, then the interactions are merely ways of conducting business legally.
What do you think?
