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Thursday, 9 July 2015

Uber - Fill Your Boots

Those who wonder why so many out there on the right hate anything called “regulation”, while they also love to see taxi drivers across the USA and Europe put under pressure by the rise of driver and rider matching services like Uber, need look no further than today’s Underground strike in London. Many who can’t use the Tube are now realising just what the future will mean, while those right-wingers are silent.
Why this should be is not difficult to fathom: the capital’s black cabs charge their fares according to regulations now overseen by TfL. You pay so much for starters, a fixed amount per mile or part thereof, and it’s more expensive at night. Those rates hardly ever change, whether all the buses and Tubes are running or not. They also don’t change if there are more, or fewer, black cabs out on the road.

That’s not how it is with Uber, and, of course, their fares are not subject to any of this cumbersome regulation. So it is that the app can impose “Surge pricing”, which means that, at times of its choosing, Uber can cause punters’ dosh to surge out of their bank accounts at a rather higher rate. This morning, those using the app to get themselves to work in London found that rate was three times (or more) what they expected.

The press was aghast, despite having cheered on Uber in the past, with the Mail typical: “That's Uber-lievable: Cab service cashes in on Tube strike misery by ramping up fares by almost 300 PER CENT as millions of commuters face a nightmare journey into work”. Punters were greeted with the cheery message “Demand is off the charts! Fares have increased to get more Ubers on the road”. Gonna cost you.

This did not impress the Standard: “Uber was today accused of cashing in on the Tube strike by increasing fares as the underground ground to a halt … The minicab app imposed ‘surge pricing’ as tube lines shut down, causing the cost of typical journeys to soar … Last night a trip from Oxford Circus to Brixton, which usually costs around £10, was estimated at £36”. And there was more.
A journey from Waterloo to Hampstead rose from £11 to £33 … Wimbledon fans who would usually expect to pay £19 to get to South Kensington were being asked for £49”. Earlier, the Guido Fawkes Twitter feed had announced “If you want to avoid the bloody tube strike get a free £10 @UberUK first ride using this link”. Ten quid wouldn’t go very far for all those examples quoted by the Standard, would it?

Demand management by varying prices - it’s accepted when it’s air carriers like EasyJet, but loathed when longer-distance train operators do it. Now the right-wing press is carping about Uber. But unless you regulate, there is nothing that can be done about “Surge pricing”, or whatever other creative title it is given. You want free markets and good old-fashioned supply and demand, that’s what you get.

Of course, you do have an alternative - go and hail a black cab. While they’re still around.


Anonymous said...

Remember this is the company which surge priced after the Sydney shootings.

The irony is this is what automation (so much hailed by Boris for tube drivers) does - automaton can't make rational decisions, they can only do what they are told to do.

Anonymous said...

What's all the fucking fuss?

It's the "free" market at work innit?

Can't they get on their bikes and reduce costs that way?

Or something.