Uber price surging on Halloween: Does it take unfair advantage of drunk people?

Does Uber’s Surge Pricing Take Unfair Advantage of Drunk People?

Does Uber’s Surge Pricing Take Unfair Advantage of Drunk People?

Moneybox
A blog about business and economics.
Nov. 4 2014 5:34 PM

Does Uber’s Surge Pricing Take Unfair Advantage of Drunk People?

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Is it up to Uber to stop drunk customers from ordering pricy cab rides?

Photo by Adam Berry/Getty Images

Uber is facing renewed outrage over its surge pricing after one woman's account of her Halloween-night cab ride went viral. On Saturday, Gabrielle Wathen took to crowdfunding site GoFundMe to raise the money for a 20-minute ride that, after 9x surge pricing, had cost her $362.57. According to an account Wathen posted alongside the receipt on Instagram, she decided to take an Uber home on Halloween after having a few drinks. The next morning—which happened to be her 26th birthday—she woke up to complaints about Uber charges that she didn't remember.

"I feel taken advantage of and cheated by the Uber name," Wathen wrote on her now-deleted GoFundMe page. "$367 for a 20 minute ride should never be justified, even on Halloween. Please donate even just $1 if you think this is utter and complete bullshit and also hilarious and very, very depressing at the same time." In a post for Baltimore City Paper on Tuesday, Wathen expanded on her point:

I understand how surge pricing works, and I understand I agreed to the charge—and requested Uber Black, which is more expensive than the UberX I would have normally requested, since it was the only one available—but, dead sober or not, I know I wasn't the only person who felt outraged that a company they trusted, and probably had good experiences with up to this point, would ask their users to agree to something as outlandish as $362 for a 20-minute ride.
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We don't know if Wathen was drunk or "dead sober," though on her crowdfunding page she said she'd suggested taking Uber to "avoid drunk driving." But for the sake of argument, let's say she or any of the other people that ordered an Uber that night was less than sober when they agreed to 9x pricing. Does that mean Uber's surges were taking unfair advantage of drunk customers?

Not really. Surge pricing, as we've explained before on Slate, is not random price gouging. Quite the opposite—it is linked directly to supply and demand. Surge pricing on Uber is also old news: It's been around and enraging riders for several years. That Uber decided to jack up prices on a rainy Halloween night when demand must have soared isn't a bit surprising—what would have been shocking is if it had kept rates at their normal levels.

The point is that while 9x fares leading to $360-plus cab rides might seem gross and expensive, they shouldn't be catching customers off-guard on Halloween. And as Uber emphasized in a statement, its app ensures that price surges are "repeatedly communicated and approved before any trip is confirmed." The rules shouldn't change just because prospective riders are drunk. If someone sends a slew of drunk texts and winds up with huge overage charges, we don't blame the mobile carrier. And when alcohol drives shoppers to hefty impulse purchases, we don't blame the stores. Why is Uber any different?

It would be another story if on Halloween a driver had picked up an inebriated customer and taken advantage of it by randomly hiking that one fare. But that isn't what happened here—and if anything, Uber's algorithmic method for determining surges should reassure riders that this won't ever happen. So yes, $362.57 is an absurd amount for a 20-minute cab ride, and it's totally fair if that's off-putting to a lot of people. But there were definitely others who were willing to pay it. If there weren't, Uber wouldn't have been charging so much.

Alison Griswold is a Slate staff writer covering business and economics.