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Mon Dec 15, 2014, 10:26 AM

Uber Charged $100 Minimum Fare To Flee Sydney Hostage Crisis Area

Source: TPM

Uber was offering refunds to riders in Sydney, Australia after the personal taxi service charged customers up to four times its normal rate to leave the area where a hostage situation was unfolding.

Authorities on Monday warned the public to stay away from Sydney's central business district and evacuated buildings there after a gunman took an unknown number of hostages inside a Lindt Chocolat Cafe. Mashable reported that some Uber users trying to leave that area saw surge pricing was in effect at four times the service's normal rate, with a minimum fare of AU$100, or $82.

We are all concerned with events in CBD. Fares have increased to encourage more drivers to come online & pick up passengers in the area.

Uber Sydney (@Uber_Sydney) December 15, 2014


Uber employs price surging when demand for the service is high -- on New Year's Eve, for example -- so that more drivers are motivated to get on the road and pick up passengers.


Read more: http://talkingpointsmemo.com/livewire/uber-price-surging-sydney-hostage-crisis

14 replies, 1969 views

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Response to demmiblue (Original post)

Mon Dec 15, 2014, 10:50 AM

1. Sounds like their normal supply/demand algo kicked in.



Given that their model is a dynamic supply/demand, I'm not surprised that they have to lure more supply into the network when they get a sudden demand rush. Listening to friends that Uber, this is just how it works. If there are a lot of riders looking for drivers, the pricing inches up until either riders opt out or drivers opt in. On the flip side, if there are few riders, the prices drop until there are fewer drivers interested in participating.

A little bit of free market at work here.

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Response to CincyDem (Reply #1)

Mon Dec 15, 2014, 01:33 PM

14. Yep. It's an automated computer algorithm.

The higher the number of requests, the higher the prices go.

It's not just about getting inactive drivers to opt in or out either. Let's say that you have an Uber driver density of 5 per square mile in an urban area. Demand in one particular area peaks, causing cars to become unavailable. The higher prices then help to lure in drivers from neighboring square miles to supplement the "local" drivers. Because those other drivers are coming in from further away, their operational costs are higher, meaning that they need to collect more money just to make the same level of profit as they collected from their local fares. The higher the rate, the more drivers they pull in from neighboring areas. The more drivers they pull in, the faster the backlog clears. The faster the backlog clears, the faster rates drop back to their normal levels.

The problem with the algorithm is that it doesn't comprehend emergency situations like this one, and responds to them like any other demand spike. On the other hand, algo wonks would point out that the spike in Uber fares probably pulled in a substantially higher number of drivers, allowing more people to evacuate than would have been possible if Uber used flat-rate pricing.

I have a lot of problems with Uber, but this isn't really one of them. Elastic pricing vs. flat pricing is more of a personal preference thing than a "liberal/conservative" issue IMHO.

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Response to demmiblue (Original post)

Mon Dec 15, 2014, 10:52 AM

2. Uber is shooting itself in the foot.

It has been banned in Spain, Brussels, , temporaily banned in Germany, will be banned in France in Jan., has been banned in Virginia and is pissing off people in several states.

Most critically, it has been banned in India following the rape of a woman passenger by an Uber driver who had a history of sexual assaults.

Almost as bad, investors in Uber include Goldman Sachs and Google , through Google Ventures.

http://www.mainstreet.com/article/uber-banned-in-5-us-cities-that-want-your-taxi-business

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Response to dixiegrrrrl (Reply #2)

Mon Dec 15, 2014, 10:59 AM

4. rape in India had nothing to do with Uber .. that is the prevading culture in that part of the coun

Women are harrased on buses,trains, sidewalks and even inside their own homes.

Rape just became a convenient excuse to protect the taxi industry.

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Response to srican69 (Reply #4)

Mon Dec 15, 2014, 12:41 PM

8. And women aren't harassed on buses, trains, sidewalks and even inside their own homes

 

in other countries?

Are you kidding me right now? Rape is a global issue. We have our own rape culture right here in the good old US of A.

"Rape just became a convenient excuse to protect the taxi industry."





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Response to srican69 (Reply #4)

Mon Dec 15, 2014, 01:00 PM

9. *had a history of sexual assaults* means that Uber didn't vet their drivers properly.

Doesn't matter if there is a pervading culture of raping and harassing women in that part of the country. Uber didn't deliver on its promise of carefully screened drivers.

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Response to demmiblue (Original post)

Mon Dec 15, 2014, 10:55 AM

3. good old capitalism

supply and demand. So that's their excuse. No, there's high demand, so let's take advantage and get them for all they are worth!

Love how the social pressure affected the market - no government regulation needed.

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Response to demmiblue (Original post)

Mon Dec 15, 2014, 11:14 AM

5. never heard of uber. how does it work? people use their own cars as taxis?

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Response to demmiblue (Original post)

Mon Dec 15, 2014, 11:36 AM

6. I despise Uber

It represents all that is wrong with capitalism.

Disgusting scumbags.

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Response to alarimer (Reply #6)

Mon Dec 15, 2014, 01:20 PM

12. What are your feelings on AirBnB?

 

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Response to demmiblue (Original post)

Mon Dec 15, 2014, 12:36 PM

7. More like

gauge-o-rama.

Screw them. There are reasons for regulated service industries, Uber is showing us those reasons lately.

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Response to demmiblue (Original post)

Mon Dec 15, 2014, 01:06 PM

10. This is only controversial if you believe prices should be based on altruism and not demand.

 

That doesn't mean stories shouldn't be written to shame them for it, though.

Because that does affect business decisions.

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Response to Ykcutnek (Reply #10)

Mon Dec 15, 2014, 01:26 PM

13. Taxis, that are regulated, can't price gouge...

 

That's the main problem with Uber for many people.

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Response to demmiblue (Original post)

Mon Dec 15, 2014, 01:20 PM

11. Uber's CEO could not be reached for comment.

 

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