Uber, the mobile start-up dedicated to connecting passengers with rides in private vehicles, faced criticism for its “surge pricing” policies last fall amidst Hurricane Sandy in the northeast U.S.
Toronto customers got a turn to experience a bit of this phenomenon, too, as the biggest summer storm in local history triggered a similar unanticipated adjustment of some rates on Monday night.
An increase in the standard amount charged to dispatch a car is presented to customers through an alert on the mobile device through which they make a reservation.
Criticism of the gouging was raised on the commentary website Medium on Tuesday morning by technology entrepreneur Aaron Solomon with a succinct suggestion to the company: “Don’t be an asshole.”
Uber Toronto’s representative on Twitter spent a few hours attempting to deflect critics with the explanation that its taxi option pricing remained the same as usual — and the surge only applied to its luxury vehicles. Regular independent cabs could still be accessed at the standard Toronto rates that are regulated by the city.
The San Francisco-based company faced licensing charges last year in regard to its Toronto taxi dispatch operation, yet its operations have continued as before. Uber has argued that its business didn’t fall under current bylaws.
Normal pricing returned once the worst of the storm was over, according to Solomon, who concurrently praised U.K.-based competitor Hailo for being more conscientious by comparison throughout the evening.
Generally, the loudest criticism of services like Uber has come from those who are plugged into the technology sector on a professional basis, who are also quickest to praise anything presented as a “disruption” to traditional businesses whether it solves a problem or not.
The option of contacting a taxi service through more traditional methods still exists in Toronto — even if it was nearly impossible to spontaneously find a driver in the midst of Monday’s massive storm.
UPDATE: Uber Toronto general manager Billy Guernier posted this message on Wednesday afternoon.
First and foremost, we hope that everyone is safe and damage to your homes and property is minimal from the thunderstorms and flash flooding that occurred earlier this week.
Over the past couple of days, you may have heard about “surge pricing,” or experienced it yourself on Monday, and we wanted to take a moment to explain what surge pricing is and clear up some common misconceptions.
First to clarify, we never surge the prices of the uberTAXI option. Regular taxis are always priced at the standard metered rate. This was the case during the most recent storm. We only surge the luxury UberBLACK option – which provides Black Sedans and SUVs.
At times of increased demand, we use surge pricing to try and guarantee reliability on our system. This means dynamically changing the price. When demand spikes (and supply fails to keep up with it), prices go up. Higher prices encourage more drivers to come onto the system. Once demand subsides or more cars become available, the price of a ride goes back to normal.
Raising prices is necessary because drivers don’t want to be out anymore than you or I do. Difficult driving conditions, gridlocked traffic, and potential for vehicle damage (their source of income) makes getting off the road a very attractive option. When drivers choose not to work, our system stops working and getting a car isn’t an option – none will be available. As a result of surge pricing, we kept more supply on the road and were able to make more than double the number of trips happen, helping to alleviate the transportation crunch the city was facing.
We love this city, and it pains us that surge pricing is perceived as taking advantage of Torontonians. That certainly wasn’t our intention. At Uber, we’re always striving to make our product better and this experience has shown that we need to do a better job explaining surge pricing. Our goal isn’t to rip anyone off — it’s to make sure that the option of a ride is there when people need it. We hope you’ll give us that chance.