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IN PLAIN SIGHT

Uber isn’t getting rid of surge pricing—it’s just hiding it

Reuters/Anindito Mukherjee
Surge: No longer this easy to spot.
  • Alison Griswold
By Alison Griswold

Reporter

This article is more than 2 years old.

Soon you’ll never see surge pricing on Uber again.

The operant word here, to be clear, is “see.” Uber still plans to increase fares during periods of high demand, using what it calls “dynamic” pricing, and what riders have come to know as ”surge.” But instead of highlighting those rate hikes with pop-ups that declare demand “off the charts!” the company will now build them into straightforward price quotes.

Uber has dubbed this new system “upfront” pricing. It’s rolling it out to UberX customers in six markets in the US—Miami, New Jersey, New York, Philadelphia, San Diego, and Seattle—and five markets in India, with more markets to follow over the next few months.

When dynamic pricing kicks in on the new system, riders in the US, for example, will see a dollar-value fare quote over small text that reads, “Fares are higher due to increased demand.”

Dynamic-but-upfront pricing has been in use for some time on UberPool, the carpool-esque service that groups riders heading along similar routes. Uber also was testing upfront fares on UberX trips in several US cities; Quartz reported in May that the company would likely bring the system to the rest of its bookings.

Uber expects that ditching surge multipliers will help with rider retention. The company says customers who see upfront fares are more likely to take another trip. This makes sense. Surge pricing, to use Silicon Valley lingo, adds “friction” to the user experience. It makes riders stop to consider whether they really want to pay 1.2x or 2.3x more, and asks them to go through additional steps to confirm their trip.

Once upfront fares take effect, drivers will still see surge pricing displayed on heat maps in their app, which helps them figure out where fares are highest at any one time.

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