AIAAIC - Uber surge pricing

Uber surge pricing

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Uber's surge pricing is designed to increase fares during times of high demand, incentivising drivers to become available and ensuring riders get a ride when they need it.

Initially implemented in 2011 as a way to address peak demand periods, surge pricing adjusts fares in real-time based on demand. When demand exceeds supply, fares increase to encourage more drivers to pick up passengers.

Uber provides riders with upfront estimates of their fares, including any surge pricing, thereby helping riders make informed decisions about their trips.

While surge pricing can be controversial, Uber argues that it benefits both riders and drivers. It helps ensure that riders can get a ride when they need it, and it provides drivers with the opportunity to earn more during peak times.

Dynamic pricing

Dynamic pricing, also referred to as surge pricing, demand pricing, or time-based pricing, and variable pricing is a revenue management pricing strategy in which businesses set flexible prices for products or services based on current market demands.

Source: Wikipedia 🔗

System 🤖

Website:
Released: 2011
Developer: Uber
Sector: Transport/logistics
Purpose: Calculate surge price
Type: Dynamic pricing
Technique: Machine learning

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Transparency and accountability 🙈

Uber has made progess in improving transparency and accountability regarding its surge pricing, but real limitations remain:

Black box decision-making. The exact algorithm used to determine surge pricing is complex and opaque, making it difficult for customers to understand how fares are calculated.
Regional variations. Surge pricing varies significantly between different regions, even within the same country. This can make it challenging for riders to predict fares, especially when traveling to unfamiliar areas.

Regulatory oversight. In some jurisdictions, regulatory oversight of surge pricing appears limited, making it difficult to hold Uber accountable for unfair or exploitative practices.
Complaints and appeals. If a rider believes they have been overcharged due to surge pricing, it can be challenging to gather evidence and prove their case.
Consumer liability. In certain regions, consumer protection laws appear inadequate to address issues related to surge pricing, leaving riders with limited recourse.

Risks and harms 🛑

Uber's surge pricing has been criticised for being unethical, unfair and exploitative, particularly during emergencies and natural disasters.

Concerns have also been raised about its impact on low-income customers who may struggle to afford higher fares.

Incidents and issues 🔥

March 2023. Uber surge pricing overcharges Sydney commuters during train shutdown
April 2022. Uber, Lyft called out for surge pricing after NYC subway shooting
June 2017. Uber under fire for surge pricing after London terror attack
January 2017. Uber decision to disable surge pricing during taxi drivers' prompts controversy 🔗
September 2016. Uber blasted for charging surge pricing after NYC explosion 🔗
December 2015. Australians enraged after Uber new year price surge jumps 800 per cent 🔗
December 2014. Uber raises prices 400 percent during Sydney hostage siege
October 2012. Uber surge pricing criticised as people flee Hurricane Sandy

System 🤖

Documents 📃

Reviews 🗣️

Transparency and accountability 🙈

Risks and harms 🛑

Incidents and issues 🔥

Research, advocacy 🧮

News, commentary, analysis 🗞️

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