The Outrageously Silly Argument Against Uber's Surge Pricing Uber can charge what it likes, and that has some people muttering that the car-service company is to blame for all our economic ills. Humbug.
By Ray Hennessey Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
When did getting a ride home become an inalienable right?
A Twitter controversy over the weekend involving car service Uber laid bare how far some people have come in misunderstanding privilege and rights.
Here's what happened: It snowed in New York City. A lot. (Well, at six inches, a lot for New York. Hold the laughter, Minneapolis.)
Because it snowed, people didn't want to walk home and so yellow taxicabs were hard to come by.
So people took to Uber, which has made a neat little business out of allowing people easy access to drivers willing to take them anywhere for a price.
Related: Car-Service Company Uber Reportedly Valued at $3.5 Billion
Uber, because it is a capitalist enterprise and is one of the few startups with a strong understanding of supply-demand economics, instituted what is known as surge pricing. In some cases, the prices for rides were seven- or eight-times what they would have been on a clear night.
Why so high? Well, Uber needs people to drive, and no one wants to go out in the cold. Surge prices attract drivers. That puts more cars on the road. When more cars are on the road, more people get rides home.
Uber CEO Travis Kalanick valiantly tried to explain this.
@nk you can never have enough drivers on big nights at normal pricing - market rates elsewhere will pull all drivers away… & NYC is just big
— travis kalanick (@travisk) December 15, 2013Of course, riders have to pay more, and that is where the controversy started.
@Jason @uber yeah... a $130 ride from the UES to downtown BK really makes me want to recommend it to a friend. #gouge
— Jackson Deane (@JacksonDeane) December 16, 2013
But then Uber faced a different kind of criticism. Somehow, the company found itself as a villain in the ongoing war against the have's and have not's.
@JorgeO @mccv surge pricing would work better in a city with less income inequality.
— jacob muffins (@nk) December 15, 2013Let's pause a second. Uber faced a two-front war. First came from people who claimed they had been "gouged." But that argument doesn't pass muster. Anyone who uses Uber knows that it is a clean, transparent transaction. You know what you are paying before your butt warms the back seat. You don't actually get the ride unless you agree to pay the price. If you don't like the price, you don't ride. Game over.
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But the second argument is that Uber is just a service for the "rich." Because some people can't pay the surge prices, Uber is somehow discriminating against them.
By that argument, though, the snowy masses of the Lower East Side should have marched into a Maybach dealership and taken whichever car they chose. Does Tesla discriminate because of the price point of its cars? Does Tiffany? Hell, since we're really not talking about that much money with Uber, about a hundred bucks a ride, does Lord & Taylor or Saks?
Certainly not. People can choose to shop at Van Cleef & Arpels or Target. No one forces you to pay a dime, for a car ride, a diamond brooch or a dirty-water street hot dog. It is a choice.
Yet, we seem to have become so accustomed to finding someone to blame nowadays that Uber has become a target, as if Uber and its pricing are somehow to blame for every perceived economic injustice in the country. How dare a company charge what it likes for a service we don't all need? Why do the drivers simply cap rates, or even do the right thing and offer the service free?
There may be an economic argument against surge pricing, at least to the degree Uber does it. But, given how well the company is run, I doubt it. It seems that if the market didn't support the prices, Uber wouldn't charge so much. For every malcontent on Twitter railing against the surge, there were probably a dozen happy, warm, dry and slightly poorer people getting a car ride back to Carroll Gardens.
People have come to mistake privileges for rights. There is no right to a car ride home. There is no right to a price you think is reasonable. At best, these might be privileges, but they don't even rise to that level.
Uber is not keeping the people down, nor is it forcing folks to walk a mile in the snow uphill. In fact, there was an air of privilege to the people who complained about the prices because New York has so many ways to get around, options abound, even in the snow. The complainers just didn't want to be bothered.
In fact, one New Yorker said it best:
Do all the people bitching about Uber prices in NYC know they can take the subway for $2.50?
— Brian Morrissey (@bmorrissey) December 15, 2013Related: Uber Incentivizes Drivers to Join By Offering Car Discounts
