$1,100 for a Cab Ride? Uber Really Needs to Be Careful With This Surge Nonsense

On New Year’s Eve, Edmonton resident Matthew Lindsey ordered an Uber to drive him and his friends home after a wedding. The car made three stops over the course of 63 kilometers and just more than an hour of driving. Normally, a trip like that would cost somewhere in the ballpark of $100 (Lindsey said previous rides of a similar route cost him about $77).

On New Year’s Eve, that trip cost him $1,114.71. This, if you’ll recall, was in addition to the cost of a wedding gift, and the social castration of being pressured into attending a wedding on New Year’s Eve.

Matt Lindsay/Twitter

If you check sites like Reddit or publications like BuzzFeed, you’ll find no shortage of similar stories; 9.9X surges in Miami Beach, $200 charges for twenty minutes of travel, Uber drivers themselves being shocked by prices and agreeing to discounts, and so on. There was even a flood of accounts of people having their pickup cancelled by the driver, presumably because the driver knew that if they just held off for a few more rides, they’d catch an even higher surge.

Turning away passengers to hunt for a higher fare, huh? Sounds uncomfortably familiar.

As much as Uber is entitled to hide behind user opt-ins, misleading stats (60% of US passengers on NYE did not experience surge pricing…between 5pm and 5am), warnings like, “Surge Pricing Shouldn’t Be a Surprise” in their New Year’s Eve Guide and macro arguments about the “free market”, they need to be very careful about this surge stuff.

UberX is taking heat from almost every angle and the last thing they need is to lose footing in the fight by taking it from the people who matter most; the passengers.

A poll from last year revealed that Torontonians were almost twice as happy with Uber as they were with incumbent taxi companies. Echoing those sentiments, Jordan Chittley wrote an incredibly popular article in The Globe and Mail entitled, “Taxi Industry Losing War to Uber Because of Customer Service, Not Technology.” Of course, to a degree he’s very right. However, he’s also very wrong; because as far as I can tell, when people say “Customer Service” in this context, at least 90% of the time what they really mean is “Price”.

The implementation and management of surge pricing has now shown its potential to feel abusive (or at least negligent) to customers. For a service that has earned most of its progress (and competitive resistance) through price – despite how cultured and strategically minded we might want to sound about a fifteen minute car ride – this is not feedback Uber should take lightly.

Because here’s the reality: if a company has excellent customer service, it should know without being told that under no circumstances is it ok for someone to get charged a thousand dollars for a sixty minute cab ride. The technology should reflect that understanding with some sort of built-in cap. Now that we’re profoundly aware that the technology is designed with quite the opposite, things look a little different.

How many times have we already heard this conversation:

“Ugh. A 2.4X surge?”

“That’s ridiculous.”

“Ya, we might as well take a taxi.

Well, we’re about to hear it a lot more.

You could argue that the number of people on NYE who still chose Uber instead of cab companies despite the price surges is proof enough that the free market effectively flushed out a clear winner in the battle of overall service quality. But if you do you’re oversimplifying and distorting the issue.

First of all, we all acknowledge that most people in North America drink alcohol on New Year’s Eve and it’s usually the ones drinking that need a ride. It’s one thing to stare at a “multiplier” with your eyes crossed, slur out some gibberish about pizza and Funyuns, and then smoosh an “OK” button with your chin. When you’re drunk, it’s very much another thing, however, to fully absorb the implications of a financial responsibility by carefully and confidently estimating a hypothetical ride fare based on a multiplier, which by the way, has a decimal in it. The diminished utility of a million stranded drunks is not Uber’s fault, but given the nature of their service, it is within their realm of their responsibility.

Second of all, because Uber launched as a smartphone application while cab companies were still pitching hitchhikers and eccentric engineers with rotary telephones, few people have Uber and a Yellow Cab app or a Beck app at their fingertips. So on New Year’s Eve, Uber did beat the taxi industry on technology; the alternative, in the eyes of the drunk, desperate consumer, was a finite workforce that could only be reached through some clunky, queue-based call centre.

Over time, the technology game will even out. And now that the unmitigated danger of “Surge Pricing” has been powerfully broadcast across the continent, sensitivity and distaste will encourage a renewed palate for incumbents who are, deep down, determined to win back customers. Nothing on a mass scale, but there will be mild-to-medium effects, both commercial and psychological. Mild, for now.

Uber ended up refunding Matthew Lindsey half of his money. That was probably a good idea.