SUPPLY & DEMAND
In Defense of Uber’s Awful Sydney Surge Pricing
As Sydney faced a hostage-taking gunman and people tried to flee the area, Uber’s surge pricing kicked in. Sounds terrible, right? Wrong.
As a cafe in Sydney, Australia came under siege by a hostage-taking gunman on Monday, those nearby attempted to flee the area. Many of them turned to the popular ride-sharing app Uber, causing the demand for cars to skyrocket and in turn, the company's so-called "surge pricing" to go into effect, with fares rising to four times the usual rate. The backlash was immediate and aggressive. It was also aggressively wrong.
The fact that Uber allowed surge pricing during a hostage crisis may lead you to believe that the company doesn't care about you, and you would be correct. But Uber does not have a responsibility to care about you. Uber is not a government entity, and it is not beholden to the general carless public during an unwelcome drizzle of rain or even a time of great distress.
I'm old enough to remember a time before Uber––about four years ago––when people somehow managed to get from point A to point B. It’s hard to believe it judging by how some react when they can't magically summon a car with a few taps of their fingers, but Uber has only existed since 2009, when it was founded as UberCab in San Francisco. Its mobile app launched the following year, and since then it has rapidly expanded from the Golden City to hundreds of cities in 53 countries around the globe. Surge pricing was not unveiled until 2012.
The premise of the program is simple supply-and-demand: when demand for cars increases and supply decreases, Uber's algorithm inflates the fee for rides accordingly, which the company claims encourages more drivers to work, which puts more cars on the road when people are requesting them most.
Surge pricing happens during rush hour and when it rains or snows; it happens on holidays like Halloween and New Year's Eve; and it has happened during states of emergency like Hurricane Sandy in 2012, after which the New York Attorney General stood Uber down and made them agree not to hike up fares during natural disasters––and he was as wrong as any of Uber's customers who complain about their inflated fares.
Agitated Uber passengers often respond to surge pricing by posting screen shots of their astronomical fare estimates or receipts to social media as a means of shaming the company.
During a blizzard in 2013, Jessica Seinfeld, wife of comedian Jerry Seinfeld, posted her $415 bill to Instagram with the caption, "UBER charge, during snowstorm (to drop one at Bar Mitzvah and one child at sleepover.) #OMG #neverforget #neveragain #real." Recently a woman successfully crowdfunded to pay off a $360 trip taken on her 26th birthday.
But Uber's surges are not price gouging, as some have erroneously claimed. Uber––which is actually not the only method of transportation on Earth, despite what it may seem like––warns passengers about the surge before it allows them to order a car, and if the surge is over two times the normal rate, the app forces users to type it in, just to make sure they really understand what they are getting themselves into.
Gawker sneered that Uber is "Ayn Rand's favorite car service."
Uber responded to the PR nightmare by reversing the surge, refunding those affected, and doling out free rides. They shouldn't have.
In his stand-up special Hilarious, Louis CK talks about this generation's attitude of entitlement towards technology:
"I was on a plane once about a month ago, and they had high-speed wireless internet on the plane, and they had never done that before. They explained to us that we were like one of the first aircrafts. I opened up my laptop, and I'm online! I'm looking at YouTube and shit while we're flying! And then it broke down, and the woman says, 'I'm sorry, but we have to fix the internet, so it's down for the rest of the flight.' And the guy next to me goes, 'this is fucking bullshit.' Like dude, how does the world owe you something you didn't know existed 30 seconds ago?"
How does the world owe you a private car, priced as you deem acceptable, that didn't exist five years ago?
If you don't like Uber's surge pricing, you are still welcome to travel by subway, cab, bus, camel, horse and carriage, or you can just fucking walk. If none of those options appeal to you, you might consider meandering over to a country with a different economic system.