Follow up on Uber Surge Pricing

uber surge protector

“Dear PoPville,

Yesterday I read the post on the perceived uptick in Uber Surge Pricing and commented about the app Surge Protector, which tells you where Uber is surge-priced and where it is not. I took some screenshots that I thought you/other readers might find interesting. The screenshot on the far left is from the Surge Protector app, showing me that there is surge pricing where I’m standing (2x the normal fare) but no surge pricing about half a block down the road. The other screenshots show that it’s true — they are charging me 2x the price if I don’t walk that half a block.

I think Uber’s model is coming back to bite them – they’ve priced their services so low that Uber drivers are turning off their Uber phones (signaling no availability), waiting until this prompts surge pricing (usually they check that from their personal phone), then going out and giving Uber rides. The Surge Protector app is a pretty helpful workaround as Uber’s system is clearly not working. The whole point of surge pricing is to get more drivers out on the road when there is naturally higher demand, but it’s not really working that way right now, which is a shame.

I know a lot of PoPville readers like me take Uber all the time so I thought this was pretty eye-opening.”


also @pgndc tweets us the screenshots above:

“@Uber_DC How would there be surge pricing with so many cars available in the area?”

50 Comment

  • This may in fact be the case, but I always ask my Uber drivers about surge pricing. I don’t take Uber *that* frequently, but FWIW none of them say they really bother paying much attention to it. Surge pricing goes into effect at different zones at seemingly unpredictable times, so the drives I’ve asked say they just drive when it’s convenient for them, and if there’s surge pricing it’s a bonus.

    Not sure whether my drivers have been a representative sample or whether they’re telling the truth. But the answers certainly weren’t what I was expecting.

  • The thing is that even under certain surge levels, you are still paying less for UberX than a taxi. But psychologically, you don’t like paying surge pricing. Surges used to be rare, but now it is every time you try to use it. I am sure Uber will figure out how to address this.

    • poor marketing for sure, they should try and raise the baseline without alarming to many riders. Personally I would prefer the mathematic cleanliness of having the 1 price be the top of the curve–meaning there should be an equal number of rides for sale at surge 1.5x and anti-surge 0.5x.

  • I think surge pricing might be the new normal. They’ve lowered the price to below sustainability, and they will have surge pricing most of the time. Right now, UberX is 1.7x at my house in Park View/Pleasant Plains, but I have 6 cars within a mile of me.

    • Which is silly though. Before they lowered their prices, no one was complaining that Uber was too expensive. Psychologically, surge pricing forces me off the app to Metro, Lyft, or on foot, even if I’m paying the same as I did two months ago with no surge pricing.

  • There are way too many cars out right now to warrant a surge. I don’t think I’m alone in saying that I’d be more inclined to take an Uber at the old rates with no surge than one at the new, reduced rate with surge.

    • Agreed, 100%

    • I agree that the psychology of the new pricing seems really wacky. I’d almost rather pay a higher, but steadier price than have fully dynamic pricing because I -feel- like I’m paying more at any surge price even when I’m not. I think a big reason the change is flipping people out so much is that it feels completely random and erratic. It’s nice to be able to know what a ride is likely to cost in advance rather than being surprised every time.

      • FWIW, I just double checked my account with Uber and comfirmed that even with the surge-priced rides I’ve taken recently, the rides don’t actually cost me more. But they do raise my stress level because I have to actually think actively about my choice (UberX vs UberTaxi versus wait 5 minutes and try again) every single time I ride rather than automatically pick UberX.

  • Surge pricing at 6:30am this morning in Spring Valley. Clearly something is going on here. I downloaded the Lyft, Hail-O and Surge Protector apps yesterday.

    • Tsar of Truxton

      Hail-o left DC…

      • Where were you about two hours ago when I was giving them my credit card details? Where? I’ve already emailed them to delete my account but, lo and behold, there’s no email address or phone number; only some buttons on the website.

  • The logic of the two separate readers above does not jive. The person with the surge app is saying that Uber drivers are turning off their phones to purposefully be unavailable and artificially drive up demand and pricing; while the screenshot tweeter says that surges appear to exist even when there are 6 cars available near his house. Wouldn’t those cars not appear if drivers, as the surge app person suggests, are purposefully turning off their phones to drive up demand? All this to say, maybe there is just something wrong with Uber’s surge algorithm. And maybe they’ll fix it?
    Unrelated, I got an Uber after the Caps game on Wednesday night and my ride was less than stellar. I wrote a complaint the next morning and received a response within five, yes, 5 minutes, and got a partial refund that was processed Thursday morning.

    • ah

      The strategy also works only if it’s coordinated. A driver won’t turn off his Uber phone unless others do too – otherwise they’d get the fare instead.

    • Tsar of Truxton

      It could be that all the drivers just put their phones back on, and the Uber app has not reacted to the new drivers yet. Obviously, the if the surge stuff was immediate, the strategy would fail because once the surge starts, if everyone went back online, they would not get surge fare. There must be a lag time before it is removed.

    • I’m not doubting your complaint. But I wonder if this isn’t another potential loss leader for that company. Is there some method to verify that a “less than stellar” ride is really worth a refund? Or is it a “the customer is always right” policy, which takes every complaint at face value? If the latter, what’s to stop people from making up complaints after the fact to get refunds?

      • Accountering

        I am sure they are tracking who is complaining. Keep in mind, on your $16 ride, they are only paying out $12, so they can easily give you an $8 credit, and it only costs them $4. I am guessing the amount of complaints they get are somewhere around 2-3%, and they have decided it is cheaper to pacify customers than it is to fight them over $4.

        • “they have decided it is cheaper to pacify customers than it is to fight them” — yes. I’ve gotten a partial refund every single time I’ve complained about anything. I try to reserve my complaints for serious concerns, but they have super responsive whenever I’ve reached out.

      • This was the first time I ever complained. (I use Uber between 2-4 times a month – so not that often.) My complaint was two-fold. First, the car smelled really bad. (I’m not sure what Uber can do about that.) Second, my driver took a very round-about way to go the 1 mile to my house (needlessly prolonging my smelly ride). He kept finding himself being forced to drive in the direction away from my house due to his lack of knowledge of the one-way streets. That, they can, and did, verify and then adjusted my fee accordingly. That’s just good customer service, in my opinion.

  • Why are people complaining? If Uber is that much better than a DC cab, you should be paying extra for it.

    • Accountering

      They are complaining because this is a blog post talking about surge pricing – and the downfalls of it. Seems reasonable to me. What did you expect?

    • Doesn’t surge pricing apply only to UberX, not to UberTaxi or Uber black cabs?
      I thought UberX wasn’t billing itself as “better” than a cab — just cheaper than one.
      It would be nice if D.C. cabdrivers actually followed the rules they’re supposed to follow, rather than claiming broken credit card readers, texting while driving, etc. I’m reminded of the song “Institutionalized,” except with “All I wanted was a taxi” rather than “All I wanted was a Pepsi.”

      • They surge each product individually, but it doesn’t always make sense. The other night, I noticed Uber SUV was on surge when I went to order an Uber Black. I ordered the black car, and an SUV accepted my ride. If I would have ordered an SUV, I would have paid 2x the SUV rate instead I got an SUV and paid less than the regular SUV rate. Doesn’t make much sense to me.
        Love the ST reference, by the way. That was my jam when I was a misunderstood teenaged skateboarder 30 (Holy Shit!) years ago.

      • “Doesn’t surge pricing apply only to UberX, not to UberTaxi or Uber black cabs?” Not exactly. UberTaxis don’t ever have surge pricing (through Uber — but they can have extra fees in weather emergencies). All others can have surge pricing, but you don’t necessarily see a surge for UberBlack when there is a surge with UberX. They surge inependently.
        “I thought UberX wasn’t billing itself as “better” than a cab — just cheaper than one.” Not exactly here, either, I don’t think. I think Uber would say it is better because you never have to be concerned about payment and because of their customer service. In general, I think the cars are nicer and newer than taxis.

      • Emmaleigh504

        lol perfect song!

  • Another funny workaround that is a sort of check and balance between Uber drivers and the DC Taxis is to use the app to get a taxi when Uber drivers are on surge. Taxis don’t follow Uber surges and end up being less expensive during surges.

  • Uber’s not a public service and doesn’t have any sort of monopoly, so I really don’t understand why people complain so much about their pricing structure. When there is surge pricing, I’ll take Lyft or a normal taxi. Yes, it would be great for consumers if Uber’s base prices were always available, but it’s not like their surge pricing somehow takes away your other transit options…at the end of the day, they’ve just added another option which is sometimes cheaper and sometimes more expensive.

  • Like I mentioned yesterday, I am an Uber driver. In January they changed the payment method for drivers. Instead of mileage and time they now pay hourly. Drivers have to drive a minimum of 90 minutes at a time to stay in the program. The surge areas move around the city pretty quickly. A driver would waste a lot of gas and time chasing the surge areas. I think whomever the person is at Uber that monitors surge areas is playing a guessing game. Sooner or later they’ll figure out the market and what works best for them, drivers and passengers. I know there was quite a bit of surge pricing throughout February because of the weather and any special events in the city/area.

    • kgw, thank you for your comments, both today and yesterday. I really appreciated your insight! What do you think of the payment by the hour method? I’ve heard that drivers who work a certain number of hours a week also qualify for certain benefits, like bonuses. Is that true?
      Out of curiosity, do you think there is a person picking surge pricing areas or do you think it might be a computer logarithm of some kind? It seems -fairly- random to me, but I do wonder if it’s automated somehow.

  • Surge pricing at 18th and NY right now. 2 mins pickup time, 7 cars within three blocks. Come on.

  • Does anyone really think that the cars floating around on the home screen are real? More often than not, I request a car and the one I get is blocks+ away (i.e. not one of the seven supposedly on my cross streets).

  • As to @pgndc’s tweet, couldn’t it be that there are so many cars out precisely BECAUSE there’s surge pricing on? Isn’t that the point?

  • sidecar has been giving away tons of rides lately, and i’ve been loving it. it tells you how much you’ll pay for the ride before you book the ride. (no affiliation with sidecar)

  • I take Uber very frequently to work, maybe 2-3 times a week. I noticed about a month ago that from about 8-10am there is always surge pricing if I put in my home address, but either a much lower multiplier or (more frequently) no surge at all if I place the pickup half a block to a block away from my house. When it was very cold a few weeks ago there were two times that the surge was over 3x at my house, without a surge a block away. I figured that Uber figured out where I lived and when I most often requested a car from my trip history and put a premium on those rides. I’ve been walking half a block every time I order a car now.

    • west_egg

      I’m sorry, “free market” or not that is super-duper shady.

      • how is it shady? they tell you the surge price before you take the trip.

        • Because instead of basing surge pricing on an actual surge in requests, they figure out when/where the person is more likely to need a car and put a premium on that time and place regardless of actual surge based on user activity. It becomes creepy when they are looking at each individual rider and where that person lives/works and when that person normally goes places, and then assigning a surge to those times/locations just for that person.

          • not really. this is not much different than airlines charging different prices based on IP addresses. as always, it’s about maximizing revenue first. Uber might give out ‘get more cars on the road during peak times’ as the reason (and it’s probably true in some ways) but anyone who thinks that’s the *primary* reason for the concept of surge pricing is probably also ready to buy a nice section of a bridge in brooklyn…

  • I am more concerned with how the app will automatically put you on UberXL instead of UberX if UberX is on surge. So then I unwittingly click for a car, thinking I am on UberX and not paying surge pricing b/c it does not prompt me, only to find after that I had used UberXL and while I didn’t pay surge pricing, it is more expensive than UberX.

    Be warned.

  • Recently, I saw a surge on UberX but no surge on black cars. I used their fare estimator for both, and the black car was either a wash or slightly cheaper. If the price is equal or better, I’ll choose a black car every time. Worth checking out if the surge is on and you have a moment to mash buttons.

  • Every time people complain about Uber I’m reminded of Louis CKs bit about wifi on airplanes: “Everything is amazing and nobody is happy.” It’s fine to wish business models were different, or to question if business models have suboptimal disincentive effects or whatever, but the things that people complain about and the tone they take with it… One of the complaints above is literally a screen shot of someone’s pocket supercomputer where the real-time Global Positioning System shows that there are 6 private drivers, available to transport him anywhere he wants within a couple minutes, that he can summon by simply tapping a finger, and the person is outraged that this might cost $7 instead of $5.

    • Amen to ExWalbridgeGuy. That great Louis CK bit is perfect explanation of this thread. Another explanation is the psychology of consumers. If it were called “Market Pricing” instead of “Surge” pricing, users would probably be more accepting of the fares, which again, are usually lower than DC taxis even with some of the lower “surge” rates. Calling it “surge” might have made sense when it was instituted and the rates only went up during snowstorms, but not now. I’d bet the Uber marketing department is working on this issue too.

  • This may be blasphemous, but I actually prefer DC cabs now. They take credit cards, the cars are (slowly) getting newer, and the drivers actually know where they’re going.

  • I find that Uber surge pricing often ends after a few minutes — but usually by then I’ve decided to cab it or walk.

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