Uber plans to replace surge pricing with a more ‘upfront’ system

By Trevor Mogg June 23, 2016

Uber

Uber drivers love it. Riders certainly do not. We’re talking about surge pricing, and it seems the company is making moves to change the way it presents those higher prices to riders using its popular UberX service.

Surge pricing kicks in when demand for Uber rides increases, for example during New Year’s Eve, rush hour, or when events put similar transportation services out of action, and can push fares to as much as six times their regular amount. It’s designed to get more Uber drivers to hit the streets to meet demand, though of course the company itself benefits thanks to the increased income generated off the back of higher fares.

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Uber said Thursday it’s about to roll out a new version of its app for where the surge pricing indicators, such as the lightning bolt that appears on the home screen and a pop-up box that lets riders know they’ll be paying a higher fare than usual, will be removed. Instead, riders will see what Uber is calling an “upfront fare.”

“Upfront fares are calculated using the expected time and distance of the trip and local traffic, as well as how many riders and nearby drivers are using Uber at that moment,” the company wrote in a post on Thursday. “And when fares go up due to increased demand, instead of surge lightning bolts and pop-up screens, riders are given the actual fare before they request their ride.”

It adds, “There’s no complicated math and no surprises: passengers can just sit back and enjoy the ride.”

So to be clear, surge pricing will remain, and the only way you’ll know it’s happening is when a message in small text appears under the dollar price in the app that says, “Fares are higher due to increased demand.”

The system is being sold as a way of simplifying the process for riders, but it also seems like an attempt by Uber to shift attention away from the unpopular feature. “Upfront fare” certainly sounds a whole lot more honest and straightforward than opening the app and seeing a full-screen “surge pricing” notification with a number and multiplication sign, and may help to dampen criticism of the system.

Under pressure two years ago, Uber decided to cap surge pricing during national disasters such as severe storms, or other emergency situations. The company’s carpooling service, UberPool, already users upfront pricing.

Uber’s new approach to the way it displays surge pricing has for several months been undergoing trials in six U.S. cities: Miami, New Jersey, New York, Philadelphia, San Diego, and Seattle, as well as a number of locations in India. The company is expected to roll it out globally in the coming months.

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Contributing Editor

Not so many moons ago, Trevor moved from one tea-loving island nation that drives on the left (Britain) to another (Japan)…

Cars

Uber is now arguing that it doesn’t actually have any drivers

An Uber App on a smartphone.

If you've been living a life where you thought Uber had “drivers,” it’s time to rethink your entire existence.
In 2017, Uber executive Nicholas Valentino, the operations manager for the company’s Atlanta operations at the time, repeatedly corrected the plaintiff’s attorney in a case when the latter referred to the people operating cars on Uber’s platform as “drivers,” the Washington Post reported Monday.
According to Valentino, they are not drivers. Instead, he wanted those individuals referred to as “independent, third-party transportation providers."
If that sounds like an off-the-cuff remark, think again. Apparently, Valentino repeated the claim a total of 16 times in the course of the case. The case, Jessicka Harris v. Uber, was filed by a woman who almost lost her leg when she was struck by a vehicle being operated on Uber’s behalf that she claimed had veered off the road.
In that same case, Uber was asked to “admit or deny that Uber is in the business of providing transportation,” to which the company’s attorneys also repeatedly “denied.”
Uber later settled the case out of court but has maintained throughout a number of similar cases that it does not employ its drivers, going as far as to say about one driver that it “never had an agency, employment, partnership, joint venture, or joint enterprise relationship with him.”
Gives you the warm fuzzies, right?
The transcript of the 2017 case comes as Uber is fighting a similar but different battle in its home state of California regarding whether or not its “third-party transportation providers” should be considered employees.
Last month, Gov. Gavin Newsom signed the bill AB5, which will give gig workers some of the same labor protections and benefits afforded to regular employees of companies, including health care subsidies, paid parental leave, overtime pay, and a guaranteed minimum hourly wage. It also gives employees the ability to unionize.
Uber strongly opposes the bill and said that the majority of the drivers on the platform would prefer to stay independent and have flexibility rather than be classified as employees.
“We expect we will continue to respond to claims of misclassification in arbitration and in court as necessary, just as we do now. But we will also continue to advocate for the independence and choice that drivers tell us again and again in surveys, polls, focus groups, and personal conversations that they value most,” Tony West, Uber’s chief legal officer, said in a blog post after Newsom signed the bill.
“Today, drivers have control over when, where, and how they work," West said. "They can choose to work for any of our competitors at the same time, and many do. In the U.S., 92% of drivers drive less than 40 hours per week, and 45% of drivers drive less than 10 hours per week. This would all change dramatically if they were employees. We will continue to defend the innovation that makes that kind of choice, flexibility, and independence a reality for over 200,000 drivers in California.”
AB5 is expected to go into effect on January 1, 2020.

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