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The surge vs the surge 25/18/2023 Uber riders have vociferously complained that surge prices fluctuate wildly from one moment to the next. Reduce the volatility of price fluctuations. Such a policy would go a long way in assuaging consumer angst and media criticism.Ģ. Uber should choose a reasonable cap, say 5X (beyond which there is evidence that consumers start becoming upset), and clearly communicate that the surge price will go no higher. Even some drivers feel embarrassed by huge rate hikes. Even though Uber has gotten better at notifying riders when and to what degree surge pricing is in effect, the fact that there’s no known ceiling is a PR problem and a customer relations issue. Second, the open-endedness generates uncertainty. ![]() First, it creates the impression that Uber is out to exploit riders by extracting every single dollar it can. ![]() Media reports from Sweden suggest that Uber has tested multiplier values as high as 50X.įor the company, an open-ended cap on the multiplier is counterproductive for two important reasons. Riders have expressed outrage at having to pay inflated prices when the multiplier starts rising beyond 5X. No one (outside Uber) knows how it is calculated or how high it can go. The surge multiplier at the heart of Uber’s pricing is a black box. Cap the surge multiplier at a reasonable number and communicate the cap clearly. Here are four actions Uber can take to solve the major problems associated with surge pricing.ġ. These factors lead to rider dissatisfaction and lots of bad press. Its key differentiator is flexibility and the convenience it provides riders, and surge pricing is essential to delivering these benefits.Ĭoncerns about surge pricing stem from the way in which it is structured and also from how it is explained to consumers. Hardly anyone has a good thing to say about it, and far too many people equate it with price gouging. Yet surge pricing has a major image problem. Studies show that surge pricing achieves what it was designed to do: it brings more drivers online, and it allocates available rides to those who value them more. The goal of surge pricing is to find the “equilibrium price” at which driver supply matches rider demand and riders’ wait time is minimized. This so-called surge pricing uses microeconomics to calculate a market price for riders and drivers alike. ![]() The Oilers are winners of four straight, including six of their last seven, and will be looking to gain some ground on the Golden Knights in this matchup.During periods of excessive demand or scarce supply, when there are far more riders than drivers, Uber increases its normal fares with a multiplier whose value depends on scarcity of available drivers. 25: The Golden Knights currently lead the Pacific Division, but the Oilers have entered the chat. Golden Knights at Oilers | Saturday, Mar. It won't be a huge surprise if they square off in the Stanley Cup Playoffs, but there's wrong with a little preview. 25: This is a matchup between two teams that possess an abundance of playoff experience. Meanwhile, the Sabres are attempting to avoid falling completely out of the playoff race as they've dropped seven of their last eight contests. 24: The Devils are in an absolute battle with the Hurricanes atop the Metropolitan Division as we come down the home stretch. A win over the Lightning would go a long way towards cementing that they belong in the playoff conversation.ĭevils at Sabres | Friday, Mar. 23: The Senators got back in the win column on Monday, but have a tough road ahead of them if they want to qualify for the postseason. New York has won four straight games and are looking like one of the top teams in the East. ![]() 21: The Rangers may have finally found their groove. Now, the Jets are have put a good amount of space between themselves and the Predators with fewer than 15 games remaining in the regular season.
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