Uber prices neared 10 times the normal rate on New Years Eve and early this morning.
“Surge pricing,” a controversial technique used by Uber and Lyft that increases the price of a ride when demand is high, certainly went into effect on Thursday evening as some customers paid hundreds of dollars for a ride.
9.9x Uber surge here in Miami Beach right now… highest I've ever seen pic.twitter.com/oX0ZxftfI7
— Brian Stelter (@brianstelter) January 1, 2016
Uber surge on the strip rn is 8.8x LOL
— ㅤㅤㅤ (@legendani__) January 1, 2016
our uber from seattle back home was $200 ……………
— marie (@maariewilli) January 1, 2016
— Syringa Ortega (@SyringaO) January 1, 2016
— Caty McMains (@catymac27) January 1, 2016
Other complaints included customers who say they accepted a surge rate — Uber forces users to confirm an increased rate if surge pricing is in effect — but then saw something much different on the receipt.
While many complained about surge pricing, others weren’t as sympathetic.
— Tsquared83 (@TSquared83) January 1, 2016
uber surge cheaper than a dui #staywoke
— Desus Nice (@desusnice) January 1, 2016
Some, including those who hailed traditional taxicabs, seemed to avoid surge pricing.
— Rebecca ❣ (@rebowers) January 1, 2016
Uber sent an email to customers and published a blog post on Thursday about “how to avoid the highest fares.” Update: The company told GeekWire that from 5 p.m. to 5 a.m. local time, 84 percent of U.S.-based trips were surging less than 3X. It added that 60 percent of U.S.-based trips had no surge during that 12-hour time period.
Lyft, meanwhile, capped its “Prime Time” prices to 200 percent. Lyft adds the Prime Time fee on top of the base fare, which confused at least one customer.
@AskLyft understandable. However, I understood the 200% surcharge would result in price total (~60), not an add-on fee.
— Patricia Jimenez (@Patricia_Jmnz) January 1, 2016
Uber has consistently defended the surge pricing practice with a basic economics argument, noting that it simply helps supply meet high demand. Benchmark Capital partner and Uber investor Bill Gurley offered this detailed analysis in 2014 for why Uber’s model differs from that used by airlines and hotels.
Last but not least, this is a candidate for today’s meme of the day.