Over the last week there has been a topic buzzing among Uber drivers and passengers alike: surge pricing. In the early days of rideshare not only were mile and minute rates a whole lot higher so were the surges. 10X surges were not that uncommon an occurrence be it on New Year’s Eve, a sold out concert at Madison Square Garden, or more controversially during a storm or transportation disaster such as a train crash.
Those 10X surges are typically a thing of the past but in Boston recently controversy still lit up the local news. When the Red Line train was derailed many passengers turned to rideshare to rescue them and were startled to see the pricing. Riders reported paying $70-$80.00 for the three or four-mile journey from JFK.
In Houston at a large country and rodeo festival riders reported paying eight times the rate they were charged to get there and that drivers were waiting in their vehicles with their app off in anticipation of the higher fares.
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Markets Seeing Uprise in Uber Flat Rate Surge
However, in many markets the multiplier surge is being replaced by a flat rate dollar surge and it will probably become increasingly widespread. This means instead of a 1.5X fare you may only get a dollar or two. Which might be justified on very short trips but on those long hauls will sting a lot. You may think that the rider is paying less – but this appears not to be the case. Uber claims that the typical driver will not be impacted in their pocketbook with this, but forums are full of drivers claiming they are losing another twenty-fiver per cent on top of the reason per mile price being cut.
It is a balancing act. Uber, naturally, needs drivers and appreciate that there are options for driving on other platforms. In my market, Orange County, California, we still have the old-school surge pricing, so I shall be closely observing if it does indeed become a nationwide thing and what consequences occur as a result.