Surge pricing – in support of Uber

A rather disappointed passenger wrote a letter complaining about a driver, a GMB trade union member, to one of the newish minicab companies. It went something like this:

“The high cost was horrible. Because there is a train and bus dispute, you should not raise your prices fivefold. It’s !£%@?*$ awful! Thieving $?!&%s!”

I have changed the wording to avoid the driver getting into trouble with his company but I can assure readers that the original complaint was worse. What was this person complaining about? Surge pricing, of course.

What is surge pricing? It is a time when the price of journeys with some minicab companies are increased to reflect a higher demand from passengers or a shortage of drivers in a particular area.

The rationale for this, according to these companies, is to encourage drivers to head to or remain in that location. Surge pricing takes effect when the algorithm used by these firms detects high demand or low driver numbers. The increase price can range from fare +50% to 500% in rare cases.

I agree with surge pricing. Yes, I know that I am, for once, aligning with Uber and the other ride-hailing companies. But here is my rationale. Drivers working with legacy minicab companies work shifts. So, they would agree to a specific or implied term in their contract to undertake a certain amount of hours per day or per week irrespective of traffic conditions.

This means they could, on occasions, be locked into heavy traffic and as a consequently earn very little on that day. With these new companies one of the few advantages is that the drivers can decide when and where, in their licencing area, to work. With surge pricing they can be encouraged to remain active and/or move to an area of driver shortage.

I have experienced both environments. It was no fun doing short jobs during a train strike or huge traffic jam. You ran down your fuel, took longer per journey and, consequently, earned much less for greater stress. I have picked up in surge areas, by accident, and when I saw the money I made on that trip I was a very happy bunny. On one occasion I informed my company that the app may have made a mistake. No, it hasn’t, I was told.

When I said “accident” above I never chased surge pricing although I knew colleagues who would go “ape” for surge pricing and would head for an area where it was in operation. I suspect that many would have purchased Marty McFly’s DeLorean so that they could get to their pick up sooner.

I didn’t chase surge because of the effort required to get to the location. Also, like a phantasmagoria, surge areas would appear one minute then disappear the next - a strategy, I suspect, that was used by the operators to shift drivers from location to location. Finally, unless the surge price was very high it was not worth it to be stuck in traffic.

I don’t understand punters who accept surge fares then whinge about it. If they do not want a minicab at five times the regular price they should not accept the quote or take the journey. Do they not understand how supply and demand works? Do they not believe in capitalism? If their driver was not attracted by the surge price they would not be out on the road picking up fares.

Finally, don’t complain to the company about the driver and surge pricing. It’s the company that sets the surge pricing, not the driver!

Dennot is an AGM trade union member and was a former representative of the GMB’s professional drivers. He is also an author and broadcaster with a strong knowledge of the private hire industry and an equality and diversity specialist. email: dennotnyack@yahoo.com mobile: +44 0740 625 276