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Amidst recent Toyota MOU, Uber opens up about surge pricing: Low phone batteries "may" lead to higher surge pricing

May 27, 2016

 (Photo: flickr.com/freestocks.org)

Drunk? Low Juice? No problem! Just pay QUADRUPLE!

Ever heard of Uber? Sure you have. Uber has quite literally changed the fabric of transportation for tech-savvy millennials world wide that depend on this nifty application to escort them to work , airports, restaurants, bars, basically the whole shindig of life itself. Hailing a yellow-cab has become a savage bygone, a relic that we’re not too comfortable doing anymore. Obviously, Uber has been doing great, with their 2015 $68 Billion valuation that elevated them above primordial motor giants like Honda, GM and Ford in but 5 years of operations. Toyota, the largest car manufacture in the world also dimed in on the huge potential of ride-sharing platforms as it announced on Tuesday that it has finalized a partnership MOU with Uber which allows flexible leasing options for Toyota and Lexus owners turned Uber drivers

2015 Uber Valuation / Photo: Forbes

However, what has been a celebrated Silicon Valley story lauded for realizing a P2P haven for users worldwide, turns out to have hidden a rather questionable underbelly from its loyal customers. During a podcast interview with NPR, Keith Chen, head of economic research at Uber, revealed that Uber users may be more susceptible to surge pricing when their phone batteries are running low. The economics behind it is simple. You’re enjoying a weekend binge-drinking session and you’ve just undergone the dreadful deed of cleaning after a puking friend and are eager to return to the tender comforts of your bed. It’s 2AM, no cabs in the vicinity, your car-owner friends have ratted out long before the night got ugly and your battery is devastatingly low. Oh look, your friend is throwing up again on the pavement. Uber’s surge price has multiplied to 4X. What choice have you got? It’s human psychology at its best. Naturally, users with low battery will get anxious about being stranded and thus, willing to pay a ridiculous multiplier. The proactive types with enough battery could simply wait for the surge prices to drop.

 

Uber is “built on the scourge of surge” as when demands for a ride surpasses the number of available drivers, prices begin to sure first from 1.5X, 2.0X, up to as much as 9.9x(is a uniformed chauffeur picking me up in a G6?). Surge prices had taken heat before when the Uber algorithm kicked up prices to 4X the regular rate when a hostage situation paralyzed the city of Sydney in 2014. Rainy days, Weekends, Thanksgiving, Christmas, St.Patrick’s Day(GOOD GOD. Max-Surge), are sweet music to Uber and their surge-tastic ears.

Uber surge prices/ Photo: Miami New Times

So how does Uber know when a user’s batter is low? Well the company claims it collects various battery life data so that the application may detect battery information and determine whether or not to go into power-saving mode. Because data collection and monitoring is embedded into the application’s programming, you can’t turn this setting off. Chen, after first bringing up the fact that they are fully aware that users are more likely to pay surge prices once their battery is low, added that Uber “absolutely [doesn’t] use [this data] to kind of like push you a higher surge price.” So the largest P2P ride-provider in the world, which has earned its monstrous valuation based purely on its fare commissions and growth potential, mind you, without possessing a single driver or vehicle, is NOT using a gold-mine of data? If that’s the case, Uber should think about hiring a new CFO. But if they do, we can all switch to Lyft. Oh wait, they have surge prices too. Since returning home responsibly early is probably out of the question, it's probably about time you invested in a portable charger.

 

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