In this day and age taxis are facing more and more competition from the likes of apps such as Uber and Lyft, where users can order up a “ride” through their smartphone with everyday people picking you up in their cars. Part of the new system is the “surge” calculation, something that Lyft removed from their fares without telling a single user.
The surge system is an automated system which increases the prices of rides when the system is swarmed with people ordering rides. Uber recently stated that it wouldn’t raise their prices more than 3.9 times when the DC metro was shut down, a policy that Lyft has had for a while, capping their prices at 3x the standard rate. This policy is now gone, with Lyft removing the surge back in February, but not everyone was aware.
Lyft told its drivers that its caps would be removed, but failed to disclose the information to its users. The argument is going that higher prices would encourage more drivers to pick up users, possibly increasing the number of people offering lifts via the app.
Trying to support drivers is always a nice move, but if it’s going to cost users money they may find the services less appealing and instead go back to classic taxi services.
Uber is a popular app that allows people to act almost like taxi’s for others, with one person pressing a button to request a ride and minutes later a driver arriving to provide the transport at a cost. With the concept of pricing, a key part of the system, Uber’s CEO Travis Kalanick may want to be careful as he faces a lawsuit of price fixing allegations relating to the app.
A US District court judge, Jed Rakoff, in New York has stated that Kalanick must face the lawsuit that states he conspired with drivers to set the fares the app provides using an algorithm, including its well-known progress of increasing rates during peak hours through its “surge pricing” model.
In his comments, Rakoff states that the plaintiffs had “plausibly alleged a conspiracy” which ultimately drove out rivals for the app. It will be interesting to see how a company as well known as Uber faces charges over something some would call a “feature” within their software while others would claim it takes money from those desperate in times of need, such as those escaping from attacks or when other transport systems are shut down.