$520 on New Year’s? (Photo by Phae)“End of the night was kind of a blur. Open bar will do that to ya.”
So said Samuel Twyman, a Penn Quarter resident who, like many others, was out celebrating New Year’s Ever last weekend.
Except when Twyman came to on Sunday morning, he woke up to a most unhappy message to ring in 2012—Uber, the smartphone app that hails upscale livery sedans, had sent him a bill for $520.
On Tuesday, we spoke with Mark Krieger, a Rockville resident who ended up paying $185 to get home from Glover Park on New Year’s. Uber representatives defended this “surge pricing” practice as a cost of doing business on one of the busiest nights of the year for the livery industry.
Still, $520?
Twyman said his New Year’s festivities began at Smith Commons at 1245 H Street NE. When it was time to head home, he pulled out his phone and opened Uber, which hailed him, his girlfriend and the girlfriend’s sister a nearby towncar.
Normally, Uber’s pricing model sets the base rate at $7, then adds $3.25 for each mile traveled plus 75 cents for each minute a car is hired. With surge pricing in effect to accomodate the severely heightened demand for livery services on New Year’s, Uber multiplied its fees by factors of up to six.
And Twyman just happened to land on the jackpot. The car that arrived to pick his party up stopped in Penn Quarter. Twyman and his girlfriend got out, but the girlfriend’s sister needed to get back to Rockville. Here’s where it got über-expensive.
Under the normal pricing scheme, Twyman’s full trip would have cost about $80 to get from H Street NE to Rockville by way of downtown. He just happened to order up his car when Uber’s New Year’s fleet was at its most stressed.
In a blog post yesterday on his company’s website, Uber CEO Travis Kalanick defended surge pricing even further:
Without a surge pricing mechanism, there is no way to clear the market. Fixed or capped pricing, and you have the taxi problem on New Year’s Eve—no taxis available with people waiting hours to get a ride or left to stagger home through the streets on a long night out. By “raising” the price you “increase” the number of cars on the road and maximize the number of safe convenient rides.
It’s a pretty mathematical defense, and even though Kalanick, who seemed eager and well-meaning enough when he flew in for Uber’s D.C. launch last month, is correct that plenty of other segments of the hospitality industry charge peak rates that are several times as costly as normal, the argument is probably little comfort to someone who woke up with a big hangover and an even bigger bill.
Credit Uber with being a little feeling. Twyman said that after he called to register his shock, he was able to whittle down the surge factor on his bill from 6.5 to three times the normal rate. Still, it wound up being a $210 hit, but Twyman still probably hit his budget limit for the fancy car service.
“Safe to say I will not be an Uber rider in the future,” he said.
