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Uber Plans To Kill Surge Pricing, Though Drivers Say It Makes Job Worth It

NPR Technology

The company is researching ways to get rid of its surge pricing, a feature that drivers like but that can make costs unpredictable for consumers. The company is researching ways to get rid of its surge pricing, a feature that drivers like but that can make costs unpredictable for consumers. Sometimes you call an Uber, and what you thought would be an 8 ride is going to be two, three, even four times more -- the result of greater demand brought on by a blizzard, or a baseball game. Whatever the reason, surge pricing is not fun. It turns out Uber is working to fix it -- or, should we say, end it.

A fare shake


IT IS a familiar ritual for many: after a late night out you reach for your smartphone to hail an Uber home, only to find--disaster--that the fare will be three times the normal rate. Like many things beloved by economists, "surge pricing" of the sort that occasionally afflicts Uber-users is both efficient and deeply unpopular. From a consumer's perspective, surge pricing is annoying at best and downright offensive when applied during emergencies. Extreme fare surges often lead to outpourings of public criticism: when a snowstorm paralysed New York in 2013, celebrities, including Salman Rushdie, took to social media to rail against triple-digit fares for relatively short rides. Some city governments have banned the practice altogether: Delhi's did so in April.

Uber has quietly started to end surge pricing as we know it


By this point, frequent Uber users are probably familiar with Pool, the company's pseudo-carpooling service. UberPool works by finding riders who are heading along similar routes and grouping their trips together. A driver might pick up you, and then another passenger, and maybe even a third, before dropping you off at your destination. For this inconvenience and added human interaction, Uber promises Pool riders fixed fares, often at steep discounts to what it charges for private cars. But there's an even more important detail about Pool that's often overlooked: It doesn't show riders surge pricing.

What Those Shocking Texas Power Bills Have in Common With Uber Surges, Broadway Tickets, and Airfare


You might think that the $17,000 bills that Texas electricity providers are sending to customers who kept their lights on during last week's historic storm reflect red state libertarian ideology run amuck. But you would be wrong. They are actually the product of the exact same approach to markets reflected in the congestion-pricing plan for midtown Manhattan adopted by the New York State legislature in 2019, in the way Broadway priced tickets for shows like The Lion King and Wicked before the pandemic, and the way airlines have been pricing seats for years. The problem is not ideological but intellectual, and has its roots in something a Democratic appointee to the New York Public Service Commission did to the pricing of electricity in New York State back in 1975. That thing is called marginal-cost pricing, and it became part of American life thanks largely to the efforts of one man: economist Alfred Kahn.

How AI Can Help Companies Set Prices More Ethically


More than ever, companies are able to tailor prices across people, places, and time. They do this to maximize profit, and sometimes simply to survive. We're in a new era of supercharged price discrimination, made possible by two major scientific and technological trends. First, AI algorithms -- often trained on highly detailed behavioral data -- enable organizations to infer what people are willing to pay with unprecedented precision. Second, recent developments in behavioral science -- often invoked with the tagline "nudge" -- provide organizations greater ability to influence their customers' behaviors.