Uber, the startup with an app that lets you summon a town car limousine with your smartphone, has gotten a lot of grief in the past for something it does called "surge pricing."
How it works: During times when demand is most high, Uber will charge customers multiples of its normal rate.
Uber says it does this to encourage limo drivers to get on the road and make themselves available to Uber customers.
It's all perfectly logical, but because many Uber customers only use Uber when they need it, surge pricing can make customers angry because it seems like the service is gouging them – taking advantage of their desperate situation.
("It's 2am, raining, the subway only comes by every 45 minutes, and you want me to pay how much?")
So today, Uber issued its customers a fair warning, writing an email that surge pricing will be in effect on New Year's Eve.
The email even says: "NYE pricing is not for the faint of heart."
"The average surge multiple will likely be 2x normal prices, but during extreme spikes it could cost you $100 MINIMUM before time and mileage charges! So be careful with those Uber ride requests. Uber rides will be reliable on New Year’s Eve, but they’ll also be pretty pricey."
It includes a helpful chart, to show customers when pricing will peak:
Here's the whole email:
Happy New Year!
Hey Nicholas,
New Year’s Eve is upon us, and we’re getting a ton of questions about how to plan Uber into your evening. It’s going to be a crazy night and Ubers are going to be pricey, so here are a few pointers to keep in mind:
Pricing Changes
Surge pricing will be in effect for New Year's Eve. The price will increase in order to maximize the number of cars on the road during peak times—and automatically decrease when there are enough cars on the road. We do this to make sure Uber is always a reliable ride, even during New Year's! For more on surge pricing, please see ourQ&A.
We'll Always Let you Know
So there are no surprises, all Uber customers will be clearly alerted of any increase in price. Using our latest iPhone app, you will be able to estimate the fare prior to requesting a ride and you will have to accept the surge price before finalizing a booking.
Buckle Your Seatbelts
NYE pricing is not for the faint of heart. The average surge multiple will likely be 2x normal prices, but during extreme spikes it could cost you $100 MINIMUM before time and mileage charges! So be careful with those Uber ride requests. Uber rides will be reliable on New Year’s Eve, but they’ll also be pretty pricey.
The Best Times to Uber
The most expensive times to take an Uber will likely be 12:15am - 2:45am. The best times to take an Uber on NYE are before 7pm, 10pm - 12:00am and 3am onward.
Have Questions?
To support the surge pricing Q&A on our blog, we'll doing doing a live chat on Monday at 1:30pm EST. Contribute your questions here.
Thank you for a wonderful 2012, and have a happy New Year!
-The Uber NYC Team
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