Uber users were confronted on Thursday morning with warnings that the company was tripling fares because “demand is off the charts”.
It warned of “surge pricing”, with fares 2.9 times higher than normal and with a minimum fare of £14.50. Even sitting in standing traffic would cost 43p per minute instead of the normal 15p.
Uber, which connects users with private-hire drivers, has driven down the cost of minicabs in London, with regular fares as low as £1.25 per mile, but often increases charges when demand is high, such as late on weekends, when lots of people want to get home at the same time. Its 15,000 drivers in the capital target areas where surge pricing is in force in order to boost incomes. There have been accusations that some Uber drivers barely make the minimum wage as a result of falling fares.
Steve McNamara, head of the London Taxi Drivers Association, seized on the price hikes as “yet further evidence of how a profit-motivated $50bn [£32bn] company operates”.
He added: “It exploits its drivers, forcing many to survive on less than minimum wage and when they can they exploit their customers, seizing on other people’s misery to make more money. If they achieve their goal of market domination by forcing their competitors out of the market … today’s prices and experiences will become the norm.”
Later in the day Uber’s fares were back to normal, but they were expected to surge again around the evening rush hour.
Labour London mayor hopeful Sadiq Khan said: “Uber may be very clever with their ‘dynamic demand’, but it still looks like a rip-off when you are struggling to get to and from work while the tube is out of action.”
Uber has proved controversial around the world.
Last month, the Guardian exposed how drivers could be approved to drive using faked insurance documents in London. Last week, Uber had to suspend its Uber Pop service in France, which connects unlicensed drivers with paying customers
Defending the price hikes, Uber said its “dynamic pricing” was fully transparent.
“Drivers work on the Uber platform on a completely flexible basis, as much or as little as they want,” a spokesman said. “During times of peak demand – when demand massively outstrips supply – fares increase temporarily to incentivise more drivers to work on the platform. As soon as the demand drops or supply increases, the price comes back down.”
Uber also benefits from the fare surge because it takes 20% commission from every fare.
The spokesman added that customers “are notified clearly in-app, and even have to physically type in the price … to confirm they have understood the pricing. Riders also have the option to get a fare estimate at that price, or can press the ‘notify me when surge drops’ button to get a message as soon as the price drops back to normal.”
Tony Parsons, the writer, was among those outraged. He tweeted: “Uber triple prices for the #TubeStrike That’s not capitalism, it’s robbery. London black cabs still the greatest taxi drivers on the planet!”
This article was written by Robert Booth, for theguardian.com on Thursday 9th July 2015 14.14 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010