Austin ride-sharers learn: When demand spikes, so do prices
By Gary Dinges and Claudia Grisales, Austin American-Statesman | |
McClatchy-Tribune Information Services |
When
After all, Rother and his two friends had consumed some beers and it was a no-refusal weekend.
But soon after Rother and his pals settled into their seats at Abel's on the Lake, they suffered a case of sticker shock: an emailed receipt from the ride-sharing service showed the fare was
"We didn't think it was going to be as expensive as it was going to be, but once it got there we were stuck with it," said Rother, a 26-year-old property management worker. "I guess we were just hoping it was going to be
What Rother and his friends experienced was known as "surge pricing," a premium multiplier that ride-sharing services like
The experience shows the two sides of the debate over ride-sharing services. While the services can often be cheaper and easier than hailing a cab, at peak times the rates can be much higher than what traditional taxi services are allowed to charge. And the ride-sharing services -- at least for now -- remain illegal in
"The fact that surge pricing is in place is communicated repeatedly to a user -- and requires confirmation -- before the user can request the trip," Altmin said.
The surge pricing -- which can push fares to more than five times higher than normal -- is primarily intended to entice off-duty
"During times of peak demand -- when there are not enough drivers on the system -- fares increase so as to incentivize more drivers to come onto the platform," she said. "Once demand falls or supply increases sufficiently, prices quickly go back to normal."
Representatives of
Last Saturday night,
"Last Saturday night was the highest rates we've ever seen in
While
City officials have discussed ways
In addition to violating rules related to ride-sharing services,
"You have companies trying to provide a service that already exists, but they want to provide it their way and ignore all the knowledge, wisdom and history of rules meant to protect the consumer," Kargbo said.
The variable prices the ride-sharing services charge are also part of the city's concerns, said
"It's a market that can be manipulated," Derr said.
But even McCrary said he believes the surge pricing needs to be reconsidered.
"I do feel like
One of the services' appeals, some say, is that
"Most of the drivers tend to be really friendly," McCrary said. "It's more of a ride-sharing app. I have made some pretty good friends, exchanged numbers and hang out. Sometimes they will invite you to grab a drink, and I can end my night early and hang out."
Users will get to see an image of the driver when they request the service. Sometimes, users develop a history, and drivers can refuse to pick them up if there are negative reviews attached.
Rother says he's not sure he will use the
Of course, users who are intoxicated might not realize what kind of price they are paying until they sober up, he said.
"If somebody is drunk, you may just want to find the easiest way home and you will just click anything to get the safe ride," he said. "On the other hand, people may say, 'Wow, if I need to pay
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