Uber customers seem a little confused about the mechanics of supply and demand.
On Thursday, ridesharing company Uber flunked the Better Business Bureau (BBB) test over Uber’s practice of surge pricing. The BBB rated the smartphone-based car service an “F,” its lowest possible rating, based off of, in part, more than 90 Uber customer complaints.
Customers said they felt misinformed about how much they are charged for their rides and do not receive adequate customer service when they complain about their fares, reported The New York Times.
Uber’s practice of surge pricing is straight-forward, but controversial.
Normally Uber operates on a fixed rate per ride. But when there are more customers demanding a limited number of Uber cars — particularly on nights like New Year’s Eve or Halloween — the price of a ride increases. In the past, Travis Kalanick, co-founder of Uber, has said that higher prices for rides would put more drivers on the road, meaning more rides for passengers.
Although Kalanick said in 2012, “I don’t think that the constantly changing car price is necessarily where we want to go,” customers have noted that in New York City, Uber raised its price of a ride during heavy snowstorms and bad weather.
Uber is not the only company that practices what economists call “dynamic pricing.” Hotels, airlines and car rental companies all adjust their prices based on demand and the time of year.
And Uber customers are not unaware that surge pricing has been put into effect. Since at least 2012, Uber has a pop-up in the app, notifying the customer of the currently surged price compared to the normal rate. Riders must OK the notification before and after they request an Uber car.
Lyft, Uber’s largest ridesharing competitor, also was given an “F” by the Better Business Bureau.
The service that the BBB provides is diminishing with the rise of online review sites like Yelp and Angie’s List. It admits that is not a government agency and that “we are not a consumer watchdog.” While the BBB offers consumers services like a list of popular scams to be aware of, the organization is funded by member businesses it marks with “accreditation.” The BBB, which operates as 113 independent branches, has even expelled a branch for selling its highest “A” ratings.
Uber, it seems, isn’t the only company that appreciates a little surge now and then.
