[noopster]

Originally Posted by speedmiester

The concept of surge pricing/peak hour charges are nothing but an eye wash to make up for the millions spent on attracting customers and drivers.
(...)
It is unfair on any service provider to charge more just because they provided me a discount or charged me less when I used their service earlier.

Originally Posted by sourav9385

And the fare discrepancy is just ridiculous! nearly twice the normal rate at rush hour! At least my good old fast track does not charge such exorbitant prices just because it gets crowded on the damn street!

So, no thank you. No more Ola/Uber for me.

I don't support surge pricing as a consumer because it seems inherently unfair and very close to the much-abhorred practice of "scalping". But do read this blog for an interesting counter-view. Keep in mind that the writer is a Uber investor and probably not as unbiased as you'd expect! The only reason I tolerate surge pricing today is because it seems fairer to the taxi drivers, whom we shouldn't forget are Uber customers as well.

[NetfreakBombay]

Originally Posted by noopster

it seems fairer to the taxi drivers, whom we shouldn't forget are Uber customers as well.

Blog writer does know what he is talking about, however as you pointed out; he has conflict of interest. Few things:

1. Uber is a marketplace and Uber’s drivers are all independent agents.

With amount of control Uber Ola Et. el. have over drivers, they are not independent.

1. They have to purchase a car specifically for Uber since a beaten-down Taxi will not get 5* and will impact revenue of driver.
2. Uber / Ola directly orchestrate car loan process and in some cases deduct bank payments before paying the driver
3. With this expense, driver is almost bound to Uber/Ola till loan is closed.

A driver won a lawsuit in US and court agreed that he is an employee not a contractor.

On average, over 80% of gross fares end up in the hands of drivers.

It is more like 100 + X% in India. This X% comes from VC fund. Article on this aspect related to china (and second hand info in India)

http://www.bloomberg.com/news/articl...g-rip-off-uber

4) Uber’s dynamic pricing (“surge pricing”) affects a tiny minority of all Uber rides, less than 10% of trips.....
...
On Friday and Saturday nights, around 1am, the company was experiencing a spike in “unfulfilled requests.” The root cause was that drivers were clocking off the system to go home, just before the weekend partygoers were ready to venture home themselves. There was a supply-demand imbalance,

If this stat is correct, Uber's pricing model makes sense.

[Chetan_Rao]

Originally Posted by noopster

I don't support surge pricing as a consumer because it seems inherently unfair and very close to the much-abhorred practice of "scalping". But do read this blog for an interesting counter-view. Keep in mind that the writer is a Uber investor and probably not as unbiased as you'd expect! The only reason I tolerate surge pricing today is because it seems fairer to the taxi drivers, whom we shouldn't forget are Uber customers as well.

Even if the blogger has vested interests in Uber, I don't disagree with the Demand Vs. Supply premise of his argument per se.

What I do disagree with is his presumption that those can't be/aren't manipulated, when all it takes to spike demand is a bunch of drivers switching off cellphones or not accepting rides, forcing the surge pricing algorithm to kick in and bringing in higher receipts thereafter. This is not hypothetical, we see it happen everyday. Uber or similar services have an easy and ready "they aren't our drivers" argument to get out of any responsibility for the artificial demand/supply mismatch.

It's not fair or ethical (possibly illegal too once archaic laws catch up with Gen Y/Z services) to say demand and supply drive each other when it's obvious to anyone that either or both can be (and usually are) easily and blatantly manipulated, all the while dressed up with the hollow claim "We do what's best for the customer".

P.S. Before someone points out the obvious, just because I agreed to be gouged (most probably because I had no other viable choice or was in an emergency) doesn't mean they're right and I shouldn't complain.

Originally Posted by mohammedismail

.....Let's say they turn their device off, then who\how is the communication sent to all the drivers in that particular area to turn their device off so that the surcharge can kick in ?

Trick question, mate?

Have you never met a cabbie with more than one cellphone? I've personally witnessed multiple Ola cabbies (at different times) chit-chatting on the phone how they will take a break and get back on the 'grid' when demand is higher. Some even brag about it.

[mohammedismail]

Originally Posted by Chetan_Rao

when all it takes to spike demand is a bunch of drivers switching off cellphones or not accepting rides, forcing the surge pricing algorithm to kick in and bringing in higher receipts thereafter. This is not hypothetical, we see it happen everyday.

I doubt if this is the case. Uber Drivers get Bonus to stay online for certain hours(which converts to days) and not accepting rides fetches them negative score which results in less bonus per ride.

Let's say they turn their device off, then who\how is the communication sent to all the drivers in that particular area to turn their device off so that the surcharge can kick in ?

[noopster]

Originally Posted by Chetan_Rao

What I do disagree with is his presumption that those can't be/aren't manipulated, when all it takes to spike demand is a bunch of drivers switching off cellphones or not accepting rides, forcing the surge pricing algorithm to kick in and bringing in higher receipts thereafter. This is not hypothetical, we see it happen everyday.

The most elegant microeconomics arguments pale in the face of Indian jugaad innovation . Your point is absolutely valid. Recently there was a case reported of a Uber passenger being requested by his cabbie to book a ride on Ola as well, for which the cabbie reimbursed him in cash. Taxi driver showed the same drive on 2 different providers! Maynard Keynes had nothing on our home grown geniuses.

[Vigkey]

To be frank, I was expecting this day to come sooner than later. The Honeymoon is over friends. I am sure the investors have started asking for returns and Ola has to pay them back now. And how do they pay? By collecting from us.

The fact is Uber are Meru are not as huge a competition to Ola as the reach of Ola is far greater than them (at least in Bangalore). Based on the fares and reach, the direct competition to Ola was TaxiForSure. Since the day I read about TaxiForSure acquired by Ola, I was telling to myself "Ok, Ola can start increasing the fares anytime soon, be prepared to get shocked".

Initially it started with static peak-time charges of Rs.50 and I was fine with it. And then that happened - Yesterday morning ~8:45 am at Cantonment Station when Ola asked me to pay 2.1X to account for peak time charges. I promptly rejected and got an Auto for myself. I paid the Auto-wallah the regular Ola charges. I was happy and he too was happy.

Ola has a huge customer-base and very few competitors - In fact it is almost Monopoly. They have pampered us for quite some time and got us used to the convenience of booking a cab from our mobile phone in a matter of seconds and board the cab in the matter of minutes - all at rates lower than an Auto-rickshaw. If someone thought this will last forever, I have to say they were very naive.

I am sure we all know how and why TaxiForSure was sold to Ola - they did not have any more investors to pay them. They were left with money to give us all the offers and also pay the cab owners handsomely. At this stage, with no investors ready to pump in money, they had 2 options -

1. Provide service for REAL charges - lose customer base - eventually go bankrupt
2. Sell TaxiForSure to Ola and get some handsome money in hand

They chose the latter. I was sure Ola will also get into that stage at some point of time and looks it the time has arrived. Now, it is time for us to pay back or for them to go bankrupt - if the customers choose to ignore them.

[Tamarind]

Originally Posted by noopster

Sorry but how is this a scam? It's not exactly a hidden charge- you say you were aware of the 1.8x pricing while booking.

Originally Posted by Rajeevraj

Would second noopster here. Would not call it a scam. Unethical-Yes.

Checked with google whether my understanding about the word "Scam" was right or not. And it says "Scam = a dishonest scheme, a fraud"

Don't you think the first one applies to their business model of booking a mini cab in this case ?

let's go through the check list here

1. For wanting a mini cab, Can you make preparations for your journey well in advance - NO

2. Whats the time within which you can book a mini cab ? - within 30 mins

3. Even if its not booked, Can i at-least know the rates for my ride well in advance ? - NO

4. Can i atleast track through reliable means on real-time how many cabs are available in my place other than just having to believe what they tell you ? - NO

5. Whats the minimum turn around time for other cab services to be at your spot ? - ~30 mins (including the telephone conversation for directions and turning back from the wrong directions he might have taken)

Originally Posted by speedmiester

If the operating costs are increasing, then increase the fare. Do not go about conning people in the pretense of "Surge pricing/peak hour charges"

Exactly !

Whether i can pay the increased fees or not is up-to me to decide - so you just inform me prior for me to take the decision. Don't push me to a cut throat time and say you got to pay extra or else i cannot take you anywhere knowing that its too late for him/her to think about other options if they are on a time schedule !

[SchumiFan]

Originally Posted by Tamarind

let's go through the check list here

1. For wanting a mini cab, Can you make preparations for your journey well in advance - NO
2. Whats the time within which you can book a mini cab ? - within 30 mins
3. Even if its not booked, Can i at-least know the rates for my ride well in advance ? - NO
4. Can i atleast track through reliable means on real-time how many cabs are available in my place other than just having to believe what they tell you ? - NO
5. Whats the minimum turn around time for other cab services to be at your spot ? - ~30 mins (including the telephone conversation for directions and turning back from the wrong directions he might have taken)

Whether i can pay the increased fees or not is up-to me to decide - so you just inform me prior for me to take the decision. Don't push me to a cut throat time and say you got to pay extra or else i cannot take you anywhere knowing that its too late for him/her to think about other options if they are on a time schedule !

Uber does allow you to get a fare estimate while choosing a cab. It also lets you know how many cabs are in the surrounding area since it is dictated by maps. You will see black cars in and around your place along with how many minutes it takes to reach you.

Any business survives on making a profit. Uber does inform people about the surge pricing and it is upto the people to choose the service or not. What I would like to see is drivers not creating a 'false' shortage of cars by swtiching off from the grid. If Uber can address that, it will be good for both the company and the customers.

Finally if people don't like Uber/OLA, they are free to choose other modes of transport. It is not like they are forcing it upon us. If anything, the low rates might force the others to cut their costs as well.

Travelled 12 kms on Saturday in a Dzire and paid Rs.169 for it in Uber. The same will cost me 244 in Fast Track. And nothing can beat the convenience of hailing a cab through the app and not waiting for the operator to pick the phone.

[Tamarind]

I have only tried OLA so cannot speak about Uber yet. Even OLA informs the standard pricing before hand - but what i was talking about is informing the "peak hour" charges before hand in probably 1 hour or so

Was Maggi forced on to you ? NO, Nobody can force nothing on anybody - but escaping by saying that is not acceptable (even under the law *i think*) !

And yes, i see the possibility where the drivers can control the demand here - but how ?
How can several unknown people jointly organize such a co-ordinated attack to create such a false demand ?

[SchumiFan]

Originally Posted by Tamarind

Was Maggi forced on to you ? NO, Nobody can force nothing on anybody - but escaping by saying that is not acceptable (even under the law *i think*) !

And yes, i see the possibility where the drivers can control the demand here - but how ?
How can several unknown people jointly organize such a co-ordinated attack to create such a false demand ?

The Maggi comparison is irrelevant. I don't think we had knowledge beforehand about the issue with the product whereas these aggregators do inform you about the surge pricing. I was informed when booking a OLA cab that a 50 rupees peak hour pricing will be added to my bill, at the time of booking. This was 4 months ago.

If one does not want to pay surge pricing, they can terminate the app and choose the normal cab operators in those times.

The choices are plenty. Ultimately there will be someone somewhere willing to pay the price they are asking and take the cab. If people are not choosing them during that period, more cabs are going to be available as the drivers have to drive to make money.

Edit: Just checked for rates in Uber; it informed of 1.5X peak pricing in Thiruvanmiyur (for Black cabs) while there was no such charge in Triplicane. The fare estimate gives the amount that we might pay if we travel using the service.
All the information on hand, it is up to us to take the decision to go with them or not.

[Tamarind]

Originally Posted by SchumiFan

The Maggi comparison is irrelevant. I don't think we had knowledge beforehand about the issue with the product whereas these aggregators do inform you about the surge pricing.

The context was not about the composition of the product as you have understood, but with the product becoming a norm without any coercion

Again, Nobody can force nothing on anybody - but stating this and escaping from the actions you were responsible for is where the question/problem is !

Originally Posted by SchumiFan

If one does not want to pay surge pricing, they can terminate the app and choose the normal cab operators in those times.

I am not sure whether you get the point of trying to travel on a time schedule

[SchumiFan]

Originally Posted by Tamarind

The context was not about the composition of the product as you have understood, but with the product becoming a norm without any coercion

Again, Nobody can force nothing on anybody - but stating this and escaping from the actions you were responsible for is where the question/problem is !

The product became a norm, how? Because people liked what was offered. And unlike Maggi, all the ingredients here are mentioned to the consumers beforehand. When people complain about surge pricing, they should also note that most times the charges are well within the rates charged by the normal cab operators.

Originally Posted by Tamarind

I am not sure whether you get the point of trying to travel on a time schedule

Try planning ahead with exceptions included If one cannot plan ahead and needs to get a cab on the go, then they should be open to pay for that convenience.

[anujmishra]

Yesterday, I was watching Bloomberg TV and in that some news was there for Uber's financial position. As per channel, Uber is in loss for the tune of whopping $480 Million worldwide. Still, they are spending to expand their market share and launching services in new markets.

Analysts were quite perplexed how they will overcome the losses they incurred till now. Some of them saying, Uber is following Amazon model where Amazon did not see profit for good 15 years or so.

Not sure how long this taxi revolution will last which actually living on funding sources and losses are mounting.

[Rajeevraj]

Originally Posted by Tamarind

And yes, i see the possibility where the drivers can control the demand here - but how ?
How can several unknown people jointly organize such a co-ordinated attack to create such a false demand ?

While it may not be easy, I assume it will not be too difficult either. Saw a potential situation where this can easily be done today. There is a huge IT Park-Ecospace here in Bangalore. Today I was passing in front around 12.30 PM. On the service road in front of the IT Park, there were at least 15 Ola cabs parked (and several non stickered cars-maybe Uber). 4-5 drivers were standing around talking. So it is safe to assume that drivers of the cars parked there know each other. This area generally always has a high demand for cabs. Now if only one of them is on the grid and everyone else is offline, Since the demand in this area is high, it will trigger the surge algorithms and make the surge pricing kick in. The guy online will see it (or I assume there is another way of broadcasting to drivers in an area that surge has been enabled-Since the purpose is to get more cabs online).

Note 1: Just a hypothesis. I may be totally wrong.
Note 2: I am not sure how Ola's surge works. For Uber my understanding is that it is all automated and the system will enabled/increase/decrease the surge automatically. If we are seeing a 2.5x surge, it means that even at that price there is sufficient demand. If there is no demand due to the surge, the surge will automatically come down.

On a separate note, UberX is 8 per km in Bangalore. So even a surge of 1.6-1.7x will work out cheaper than other options. It will make it more expensive than an auto. But still saves you the hassle of stepping outm finding an auto, arguing over the rate and being exposed to the heat and dust

[Tamarind]

Originally Posted by SchumiFan

Try planning ahead with exceptions included If one cannot plan ahead and needs to get a cab on the go, then they should be open to pay for that convenience.

Instant foods (like Maggi noodles) will have such violations in food safety. Try planning ahead with exceptions included If one cannot plan ahead and needs to get a meal in two minutes, then they should be open to pay for that convenience

How does that sound ?