Thanks to something called surge pricing, the internet has a new sport: laughing at people who take extortionately priced Uber rides and have the temerity to whine about it afterward, as if the invisible hand of the market cajoled them into pressing "confirm" on that $750 ride to the grocery store. That said, surge pricing does have a legit reason to exist beyond our perverse entertainment: It's a way of getting more drivers onto the road and collecting passengers during peak periods of demand (or hostage crises, apparently).
Unfortunately, that's bullshit, because, as we're about to demonstrate, this system is totally fucking broken.
Firstly, there's no guidance on how the surge rate is even calculated and, even worse, no upper limit on surge pricing. That's bad news, because it's possible to take two identical rides on consecutive days and pay two (sometimes wildly) different surge prices. What's the difference between 2x and 4x in terms of traffic conditions, weather, and other factors? Uber doesn't like to say. It also doesn't like to talk about the maximum that your ride could be force-multiplied. As far as we know, the upper limit is 50x, but that's only based on a) the testimony of a random engineer, and b) because some riders accidentally got that price one time. The drivers affected presumably spent weeks cleaning those brown stains out of their backseats.
Luckily, when you make $57 a minute, you can afford the good stain removers.
It used to be that Uber would manually manipulate the surge pricing rate lower when it hit a figure such as 6x. Nowadays, it's common for the surge pricing to hit upwards of 9.9x with no interference from the company. Why? We don't know. And that's a huge fucking problem for the service that's trying to replace cabs, because say what you will, but at least there are regulations limiting the amount that cab drivers can charge, as well as actual guidance on how those rates are calculated.
Chris Hondros/Getty Images News/Getty Images
A taxi fare rapidly rising right before your eyes might be Hell on your wallet, but at least it's honest.
This wouldn't be so bad if surge pricing actually worked at getting more drivers out onto the road, either. It flat-out doesn't. The key problem is with the way that surge pricing fluctuates: It's been found that, during periods of surge pricing, drivers tend to stick to locations where they're certain of a fare (e.g. stations, city centers, etc.). It's not because they're greedy -- it's because by the time they've traveled out to a distant customer (e.g. in the suburbs), the surge pricing period could have ended, thus making all that effort worthless. Regardless of where the customer is, they're being screwed. If they're in the 'burbs, surge pricing ain't bringing any drivers to them (whereas regular pricing might have). If they're in the city, they're paying a surge price when they wouldn't have had any difficulty finding a ride in the first place.
Uber's CEO, showing somehow even less sympathy than you'd expect him to.
Still, it could be worse. You could be paying a hideous, ridiculous surge price on a journey you didn't even take, thanks to the newly created underground market for stolen accounts.
Guys, is it just us, or is the sharing economy complete bullshit?
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