Uber has replaced surge pricing with something even worse
Everyone hated surge pricing, a feature that app-based cab aggregators like Ola and Uber employed during rush hours.
Surge pricing meant paying extra and it was opaque. Uber and Ola argued the amount of surge - on some occasions as high as four times - was determined by algorithms. No, human intervention there. But that didn't make it any easier for riders to pay inflated fares.
When your consumers, and regulators, hate something so much, as a company you have to fix it. So Uber has acted. It has killed the surge pricing.
Should we say bravo? Hold on. The new mechanism is even worse. Actually, it is much like what Delhi's autowallahs employ while dealing with commuters.
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| Uber has scored brownie points by "removing" the universally-hated surge system. |
Instead of showing consumers surge, Uber now just shows them the expected price that the trip will cost. On some days, this price for a 10km journey could be around Rs 150. At some other times, it could be around Rs 500.
If you found the original system of surge pricing opaque, you will loathe the new one. Now, you don't even know how much extra you are paying for the trip or what you would pay in case you decide for the rush to subside.
Sure, people who use Uber on one or two specific routes will know the normal fare but people who are new to a route or location will have to second guess whether they are paying inflated price or if Rs 500 for the 10-km trip is all fine.
For Uber, benefits of introducing the new system are two. One, is the psychological benefit it gets by keeping consumers in the dark.
The earlier system would tell how much extra you are paying in X amount. That had more likelihood of a rider saying no because he will have clear information on the surcharge.
In the new system, it's just the lump-sum amount. It's more palatable, psychologically.
Second, Uber scores brownie points by "removing" the universally-hated surge system. It may even help its fight against governments, including the Delhi government.
Unfortunately, for consumers, the end of surge pricing is not good. It limits the amount of information available to them, and in turn limits their choices.
(Courtesy of Mail Today)