Rip-off Strategy?

Commuters slam the cab-service company for its surge prices during peak hours in city.

Published: 24th July 2015 01:28 AM  |   Last Updated: 24th July 2015 01:28 AM   |  A+A-


If you are a dependent on app-based cab services in the city, on a rainy day, finding one is an insurmountable task. Even if you do manage to a find a cab operating in the vicinity, you are forced to pay more than twice the amount you normally pay.

u1.jpgIronically it is Uber, the cab service that is known for its cheap rides, that has left its loyal users frustrated due to surge pricing during peak hours. 

The company’s ambitious plan to transform commuting in Hyderabad, has stumbled upon a roadblock, after their abnormally high surge pricing. Earlier this month, Uber signed a Memorandum of Understanding (MoU) with the Telangana government, where the cab service company committed to invest Rs 317 crore over five years, for a centre in Hyderabad to train its drivers and customer support staff.The San Franciso-based company aims to create thousands of jobs and entrepreneurship opportunities, fostering technical innovation and research into smart city initiatives.

Smart pricing strategy?

However, with Uber’s growing popularity in the city, the company’s pricing strategy has irked customers, who are left stranded due to their inability or sometimes unwillingness to pay such steep prices for a cab ride.

“Uber is a superior cab service in the city, in terms of drivers, cars and efficiency. However, in peak hours they have high prices, which makes it impossible for us to ride. As a result, we’re forced to explore other avenues,” laments Ashwin Athrey, an engineering graduate.

Putting things in perspective, he says, “A ride from Begumpet to Hitech city normally costs Rs 200. However, during peak hours, Uber charges four to five times the original price. So what normally costs Rs 200 can even cost up to Rs 1000,” he fumes.

u2.jpgSeeking alternatives

Though the cab service would notify the customer about the surge in prices well before a booking is made, commuters find little consolation in that.

“When there is surge pricing, I don’t use Uber and look at other means to commute. However, when it is raining or if someone is desperate for a cab, they are forced to pay much higher price for what is an ordinary cab journey. Uber is basically cashing in on people’s helplessness, which is extremely unfortunate,” fumes Kirti Rao, a French teacher.

No underlying strategy

Defending its pricing strategy, executives from Uber insisted that surge pricing comes in to play only when there is excess demand.

“We want riders to rely on us for a ride whenever they need. The alternative to dynamic pricing would be the inability to get a ride at all, and that’s never the experience that we’re trying to provide,” said an Uber spokesperson.

“We’re not trying to take advantage of riders according to the situation. During a time of surge pricing, the system won’t let a ride be requested unless the rate is accepted first. You’ll never be charged an increased rate without agreeing to it so that you can always make the choice that’s right for you at the time. It’s just that usually in peak hours the demand for a Uber ride is high and the only way for Uber to make up for that demand is with dynamic pricing where prices of fares will be high,” the spokesperson added.

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