I received an email from Uber on Wednesday informing me that they were moving to “upfront pricing”. What this means is that you’ll see how much your Uber ride will cost before you book it.
Now, Singapore will start enjoying upfront fares when they request their uberX rides! Simply enter your destination and get the actual trip fare before you request a ride, just like you already do with uberPOOL. This way, you’ll know your fare before you go; letting you decide what’s best for you and your budget.
Upfront fares are calculated using the expected time and distance of the trip and local traffic, as well as how many riders and nearby drivers are using Uber at that moment. When fares go up due to increased demand, instead of surge lightning bolts and pop-up screens, riders are given the actual fare before they request their ride.
There’s no complicated math and no surprises: just sit back and enjoy the ride!
No math! No surprises!
Uber may bill this as transparency and clarity. In reality it is anything but.
Uber now does not clearly disclose when there is a surge in place.
Consider this example, going from my home (approximate locations used, sorry fangirls) to my office in Collyer Quay. This route is normally $13-$17, according to Uber’s official price estimate.
Wonderful. I’ll take Uber to work today. And look, no scary surge symbols! Looks like a great day to take an Uber
The trip today costs more than 3.0X the regular price!
Clearly there is a surge going on around my area, but you’d be hard pressed to tell that given the total lack of surge symbols.
Why is Uber doing this?
Consider the example of John. John wants to go from Point A to Point B. He gets a quote on Uber- $15.
“Ok,” says John. “That’s fine. I’m willing to pay $15 to get from A to B.”
What John doesn’t know is that the usual fare is $10, and he is paying a 1.5X surcharge. Now, if John knew this, he might be willing to wait a while for the surge to go lower. But because John isn’t informed there’s a surge, he may assume this is as good as it gets. Uber therefore captures $5 of value it wouldn’t otherwise have.
Uber knows that the lightning surge symbols are a surefire way to scare off customers. So by removing them and not telling you what the “regular price” should be, it is removing that psychological barrier.
Uber makes sure that it is the price, and not the presence of a surge, that is the deciding factor in whether or not someone hails an Uber. Put it another way- if you think that Uber doesn’t fit into your budget, fair enough, Uber gets that. But if you think Uber could fit into your budget, you’re not comfortable about paying that additional 20, 30 or whatever % surge, Uber removes that barrier from your mind by not telling you about the surge. And that, to me, is what is so insidious about this move.
What makes me more riled up about this is Uber’s disingenuous way of passing this off as some sort of convenience to its riders.
See these gems from the FAQ’s (highlights in red are mine)
Q: Dynamic pricing icons no longer appear for upfront pricing product – why?
A: This new way of showing prices accounts for surge, but provides the rider with more precise information up front. For example, instead of seeing that a fare will cost 1.5x, you will see that the trip will cost $10. This is aimed at getting riders like yourself more information upfront, so you can choose the product that best meets your needs and budget.
Q: But does dynamic pricing still exist?
A: Dynamic pricing still very much exists, just as it does for POOL. The upfront fare takes into account all the factors that typically affect a fare, including demand at that moment in time in that part of the city, traffic, the length of the journey and tolls. However, since a rider is given a price upfront, the rider actually has more information about the cost. For example saying a trip will cost $10 provides more precise info to the rider than saying the trip fare is surging by 1.5x.
Except it doesn’t. Because before you used to do both- disclose the surge and provide the fare estimate in light of the surge. This reminds me of how airlines try and pass off devaluations as “enhancements” to their customers.
So please take heed of this new sneaky move by Uber. I’ve got the fare charged for my usual routes more or less memorized so I should be able to tell when there is a surge, but when I’m dealing with places I don’t regularly frequent it’s a lot more guesswork for me.
Pitchforks and torches, people.