Uber’s surge pricing system means the cost of your ride could soar as more and more punters look for a way home once the clock strikes midnight. Photo: Dominic LorrimerRevellers ringing in the New Year across the capital will have an extra option to travel home thanks to Uber’s entrance into the Canberra market – but at what cost?
Uber’s dynamic pricing system means the cost of your ride could skyrocket as more and more punters look for a way home once the clock strikes midnight.
Surge pricing is the honeypot the ride-sharing company uses to ensure there are enough drivers when demand balloons during big events and holidays like New Year’s Eve.
But how much can your ride actually blow out? That comes down to the price-elasticity algorithm the company uses to ensure there are enough drivers in areas of high demand.
An Uber insider said there’s no way of predicting how much prices will spike until the demand is there, but a surge price of more than three times the base rate was in place in parts of Sydney last year.
“The festive period is one of our busiest times of the year, as more people require transport to get to and from Christmas and New Year’s parties and events,” a spokesman for the company said.
“To help accommodate for this increase in demand, we actively encourage more driver-partners to get on the road over the festive period. This is particularly important given some of our busiest nights of the year take place in December.”
It’s not uncommon to utilise dynamic pricing – hotels and airlines do it as well – but the pricing method came under fire last year as passengers in Sydney reported being caught off guard by the rise in prices.
A $35 trip home from the Sydney CBD to Coogee cost one woman $213 with an Uber car service last New Year’s Eve.
The company maintains it takes notifying customers of current pricing seriously.
An email from Uber to its users on December 31 last year warned them fares could be over $100 at 2am, with the highest rates expected between 12.30am and 4am.
When surge pricing is in effect, a lightning bolt is displayed in affected areas.
A notification will also pop up, forcing you to accept and punch in the higher rate before it will connect you to a driver.
Those who don’t want to accept the inflated price can request notification when the surge pricing has subsided.
“My hot tip would be to book an Uber at 11.59 and lock it in before the rush, which causes prices to rise,” Uber’s general manager for Australia, David Rohrsheim told Fairfax Media on Sunday.
Despite being much cheaper than taxis, there could be one advantage to ditching your Uber this New Year’s Eve.
Maximum taxi fares are controlled by the ACT government, with a fixed rate of $2.37 per kilometre in a standard taxi between 9pm and 6am Monday to Friday and all day on a Saturday, Sunday or public holiday.
Taxi drivers can also pick passengers up in Queanbeyan – despite Uber being legalised in NSW, Queanbeyan is still a blackout area due to licensing issues.
Canberra Taxi Industry Association chairman John McKeough said patrons who book a taxi online or through an app can elect to receive a phone call from a driver when they are out the front.
Taxi passengers can also choose to receive a text letting them know when their taxi is a kilometre away.
“In the city it’s going to be very busy after midnight so we ask people to be patient,” he said.
“You don’t have to accept the surge pricing – you can wait for a taxi, it’s been proven taxis are quicker anyway.
An Uber spokesman encouraged riders to always get a fare estimate, available in the app or on their website.
He also recommended users split the fare with up to four friends.
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