A man in Perth (Australia) has a different kind hangover today after copping a whopping bill for his ride home under Uber’s controversial ‘surge’ pricing reports news.com.au. Kris Keen, 35, caught an UberX with his friends from a party in the Perth suburb of City Beach south to Hilton, 20km away, at about 1:30am. The normal fare for the 30-minute trip would have been $37.31. Due to Uber’s surge pricing, which increases fares via an algorithm at times of peak demand, he was hit with an 8.9 times multiplier, bringing the total fare to $332.06.
Mr Keen, who admits to being slightly ‘merry’ at the time, only realised when the trip receipt came through about 15 minutes later.
“I had absolutely no idea it was going to cost that much,” he told news.com.au. “One of our friends left a little bit earlier and she paid a 2 or 2.1 multiplier, which all things considered is probably reasonable.”
Mr Keen said he didn’t know about Uber’s fare estimate feature, and said he thought the “8.9” referred to a call-out fee. “I’d be happy to pay a peak fee understanding it’s New Year’s Eve, but 8.9 times the whole fare is outrageous,” he said. “I think unfortunately at the end of the day I got stung.” He has lodged a complaint with Consumer Affairs WA regarding the “ambiguity of the notification of surge pricing” and has “challenged [the] fairness of it”.
In response to a complaint lodged via the app, an Uber representative told Mr Keen: “Your trip was taken at a time when there were not enough drivers available to meet the current demand for trips in your area. “To incentivise more drivers to proceed to your location, our app applies a surge rate. This is why a car was made available at the time you requested. However, riders cannot accept a trip during this time without accepting this increased trip cost. For example, before requesting a trip the surge rate is displayed and all riders must click ‘I accept higher fare’.”
“You are in no way obligated to accept this higher rate and you can always click ‘notify me when surge ends’. When looking at your trip, our records show that a pricing notification screen displayed a dynamic pricing rate of x8.9.”
On Thursday, the head of the taxi industry peak body slammed Uber’s surge pricing, describing it as “exploitative price gouging”.
“It’s an exploitation of a circumstance that disadvantages the consumer.”
UberX has around 20,000 drivers across Australia, with 6,500 in Melbourne, 5,000 in Sydney, 4,500 in Brisbane and the Gold Coast, and 2,200 in Perth. The NSW government gave Uber the green light to operate earlier this month, after the ACT (Canberra) became the first state or territory in Australia to legalise the ride-sharing service. Under the new arrangement, Uber drivers will pay a registration fee of $45 and will be subject to criminal and safety checks.
Both taxi and Uber drivers will have to pay the state government a $1 levy per trip for a maximum of five years to fund a compensation package, budgeted at $250 million, which will see taxi plate owners receive a $20,000 cash payment.
According to a study by comparison website Finder.com.au, UberX is around 30-40 per cent cheaper than hailing a taxi, with the savings normally greater when the distance travelled is shorter.
- UberX legalised in New South Wales.
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