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Previewing Tonight's Uber Surge Pricing Schedule

Tyler Durden's picture





 

During a recent East Coast snow storm, car service Uber got into hot water with various media outlets and the general public because due to a dramatic spike in demand the company announced, and got away with, surge pricing as high as 6x its normal rates.

As often happens, those most shocked by this outcome were pundits who have a problem with grasping the simplicity behind supply, demand and equilibrium pricing: if you don't like Uber's rates, use the competition. There is no competition? Then you are stuck with Uber's rates, ethical concerns about price gouging and lack of government subsidies (for now) aside. Simple.

And as long as there is no futures market allowing over the horizon surge price hedging, this pattern will continue (incidentally, with Wall Street's ingenuity for financial innovation we are surprised nobody has offered said futures market yet).

However, since no matter what, there will be yet another outcry against Uber tonight, mostly by its most fervent customers and the same confused media outlets, the company has preempted the sound and the fury, and has preannounced just what times riders can expect to pay up to 6x (or more) their usual fare as they contemplate going from point A to point B across the various metropolitan centers in which it operates.

To wit:

New Year's Eve is upon us and we want to give you some quick pro tips for getting around with Uber. This New Year's Eve we'll have a record number of cars on the road ready to get you where you want to go. But, that doesn't change one simple fact: on NYE, everyone wants to move around the city at exactly the same time!

 

We use surge pricing to help solve this problem. Higher prices bring more cars onto the system when you need them most, and prices return to normal as soon as there are enough open cars. When drivers are paid more to log on to Uber, they complete more trips on Uber.

 

But you can avoid the peaks of surge pricing with good timing on when you travel. Check out our smart tips below, and don't forget you'll always know the price before you request.

So for any enterprising business that seeks to steal away Uber's client base, the best time would be when the backlash against Uber would be greatest, i.e., when the highest surge fares will be in effect. Uber has been kind enough to let everyone know in advance when this will be:

Capitalism (for those who remember how it works): take it away.

 


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Tue, 12/31/2013 - 15:22 | Link to Comment Alternative
Alternative's picture

C'mon my haitian brothers. Let's do it! What? No? Mamon calling you tonight?

Tue, 12/31/2013 - 17:03 | Link to Comment TheLooza
TheLooza's picture

Last New Years my PE friend foot the bill for a 2 am 6.0x ride from Marina Del Rey to downtown La (~16 miles). Cost for him $567.  Cost for me? A fat chick.

Tue, 12/31/2013 - 18:02 | Link to Comment gmrpeabody
gmrpeabody's picture

So..., you were the looza then.

Tue, 12/31/2013 - 15:18 | Link to Comment negative rates
negative rates's picture

I'm about to bang my head against the wall any time now.

Tue, 12/31/2013 - 15:19 | Link to Comment maskone909
maskone909's picture

WTF is Uber?  some sort of Hipster bullshit?  im visualizing a jeepney powerd by wheatgrass and unicorn farts.

Tue, 12/31/2013 - 15:27 | Link to Comment zhandax
zhandax's picture

i-gypsy cab.  It's what passes for entrepreneurship in the new normal.

Tue, 12/31/2013 - 18:03 | Link to Comment gmrpeabody
gmrpeabody's picture

WTF is i-gypsy cab?

Tue, 12/31/2013 - 15:25 | Link to Comment monopoly
monopoly's picture

Uber means....?

Tue, 12/31/2013 - 17:05 | Link to Comment RyeWhiskey
RyeWhiskey's picture

Unregulated THEFT ?

Tue, 12/31/2013 - 18:04 | Link to Comment ultraticum
ultraticum's picture

I know, Rye, you prefer the regulated kind of theft.  Now get back to your K street cubicle.

Tue, 12/31/2013 - 15:27 | Link to Comment blueRidgeBoy
blueRidgeBoy's picture

if you don't like it, there's always walking

Tue, 12/31/2013 - 15:30 | Link to Comment adr
adr's picture

Oh just what I would want, drunk New Yorkers using my car.

I saw the ride sharing BS the last time I was in Boston. Really didn't get it. Of course I drive a standard shift and don't even let my wife touch my car.

Tue, 12/31/2013 - 15:38 | Link to Comment de3de8
de3de8's picture

Yeah,wife drives a beater so could give a shit.

Tue, 12/31/2013 - 16:23 | Link to Comment W74
W74's picture

It's like Maskone said below, it is a Hipster thing.  These kids either actually have money and/or don't give a shit about burning/wasting money.  Why anyone would want to drive in NYC is beyond me, I will never do it again since just paying tolls to GET TO New York, whether by bridge, tunnel or New Jerseystan constitutes enough wasted treasure for me.

Tue, 12/31/2013 - 16:19 | Link to Comment Catullus
Catullus's picture

Dallas continues their war on Uber, with lobbying help from yellow cab. The city was trying to regulate the minimum price of what they considered a "limo" to be at $45k, had to be ordered 30 minutes in advance, and set minimum prices.  Discussed the whole ordnance behind closed doors,  used the Yellow Cab legal department's write up of the bill verbatim.  Took vice police off cases to cite Uber drivers for violations of code. The mayor and other started the fear-mongering the "safety" issues.

The one time of the year they charge more than the going rate for a price controlled cab and they take shit.  No mention that it's cheaper and faster every other time in Dallas.

Tue, 12/31/2013 - 16:34 | Link to Comment Seize Mars
Seize Mars's picture

Corporatist ratfuck scumbags.

Tue, 12/31/2013 - 16:22 | Link to Comment Lei_in_AZ
Lei_in_AZ's picture

used it over the weekend.  upscale cab service you can order from your phone app.  easy.  real time status of where the car is and how close to your location.  reasonable (at the time).  upscale vehicles with super polite and clean cut gentleman driving us.  loved it.

Tue, 12/31/2013 - 16:34 | Link to Comment Seize Mars
Seize Mars's picture

Enterprise, baby!
Freedom causes prosperity.
You can't legislate it and you can't print it!

Tue, 12/31/2013 - 17:50 | Link to Comment RyeWhiskey
RyeWhiskey's picture

Easy to have "upscale" cars when one doesn't pay same taxes, follows same sets of rules and regulations, and offers no commercial insurance as their local competitors are being forced to. Think about it - at $72.00 minimum fare it better offer something... A GPS app. And social networking with your driver.... Right. All good here.

Tue, 12/31/2013 - 18:25 | Link to Comment Lei_in_AZ
Lei_in_AZ's picture

its only $72 after midnight on new years eve, peak demand time.  apparently you've never had to get a cab on new years eve, its common to wait 2+ hours here.  it was regular rates for last Friday night.  and you see the fee before you agree to the ride.  its an alternative to inconsistent cab service in my area or having to rent a limo for a party.  they own their vehicles, not like a cab company when you're "renting" them for your shift.  so i'm pretty sure they have to carry insurance.

its a car service.  like business men get lincoln towncars for meetings or airport runs.  theres a market for it.

Tue, 12/31/2013 - 18:45 | Link to Comment Kreditanstalt
Kreditanstalt's picture

Never mind the cab service  - or the app.

Can't afford the phone.

Tue, 12/31/2013 - 16:53 | Link to Comment Kreditanstalt
Kreditanstalt's picture

Yet another American company that produces absolutely NOTHING, adds nothing to GDP and creates no value...

Tue, 12/31/2013 - 17:04 | Link to Comment RyeWhiskey
RyeWhiskey's picture

Who needs to add to GDP when you have a GPS-enabled iPhone app?? Ain't GPS makes GDP absolutely obsolete? Oh... wait...

Wed, 01/01/2014 - 10:53 | Link to Comment Capitalist
Capitalist's picture

If people are using it then they are obviously getting value from it.

For any transaction to take place both parties must value what they are receiving more than what they are giving.

Please learn Austrian Economics.

Tue, 12/31/2013 - 17:00 | Link to Comment RyeWhiskey
RyeWhiskey's picture

Uber takes profits out of local economies and sifts them out to their offshore masters. But "Do no evil", ok? -- your "friends" at Google Inc.

Tue, 12/31/2013 - 17:52 | Link to Comment withglee
withglee's picture

Seems like anyone could put up a phone ap ... kind of like Craig's list for rides. How could the government regulate it? Who would they clamp down on? Would they make it illegal like hitchhiking?

Tue, 12/31/2013 - 18:01 | Link to Comment Oldballplayer
Oldballplayer's picture

Every day I thank the Lords of Kobol I am too old for this silly shit.

Do NOT follow this link or you will be banned from the site!