Uber has become embedded into our transportation culture, for better or for worse. One of the least liked aspects of Uber’s pricing model is their use of surge pricing. Uber defines, and justifies surge pricing as follows:
“Uber rates increase to ensure reliability when demand cannot be met by the number of drivers on the road. Our goal is to be as reliable as possible in connecting you with a driver whenever you need one. At times of high demand, the number of drivers we can connect you with becomes limited. As a result, prices increase to encourage more drivers to become available.”
Now, whether you agree with that statement or not, surge pricing is here to stay (just like checked baggage fees, Economy Plus and all of the other ways that travel companies have learned to profit from the traveler). A Washington Post columnist wrote a wonderful story on whether surge pricing actually works to achieve Uber’s goals.
Surge Pricing Nightmare
Everyone has a surge pricing nightmare story, from Jerry Seinfeld’s wife who spent $415, to Michelle Beadle who dropped $132 on a short trip. Personally, during the ‘Snow-pocalypse’ in New England this past winter, I saw surge fares up to 3.9x the normal rate (!) before Uber responded to the public backlash and capped the surge to 2.8x during snow storms.
Even without terrible weather, many of us live in cities (think: Los Angeles, New York City, Chicago etc.) where surge pricing is a normal part of every day life. For example, Boston Uber fares often surge to between 1.5-2.5x normal rates during a perfectly pleasant day.
So what is the average rider to do if he/she wants to reduce their Uber expenses?
Today, Uber released some data that may help us think about planning our travel to minimize exposure to Uber surges! In this report, Uber provides fascinating data about rider usage over time.
Uber Article on Rider Usage
Uber had this to say about their article:
“In major metropolises, don’t we all live under similar daily rhythms of work and play? Well, from our data, the short answer is no! Although you might think that every city is the same, every city has its own culture and signature. They all move differently.”
In this interesting examination of rider usage, we see clear patterns in different cities. In their data “every row represents an hour, and every column represents a day of the week. The color brightness reflects the frequency (number) of rides for that hour, for that day. Each day is compared to itself.” Uber provided data on 6 cities, including 5 in the United States: Chicago, Los Angeles, Miami, New York City, San Francisco, and London.
New York City
Some interesting patterns emerge. For example, from the article, Uber reports that in New York City:
- On weekdays from 7-9 am, trips spike on Monday through Friday. This likely represents people’s morning commute to work.
- From 5-10 pm, we see another set of concentrated trips. People leave work and head home or go out for dinner and drinks.
- On weekends, the pattern is completely different. Starting Friday night, people go out later; this is reflected in the brightness from 12-2 am on Saturday. Several hours later on Saturday morning, from 7-10 am, the number of Uber trips is considerably smaller as people sleep in. The same pattern picks up on Saturday night from 12-2 am, and then falls to a lull on Sunday morning as well (4-9 am), which extends a few hours beyond the 1-5 am trip dead zone on weekdays.
However, a distinct pattern emerges in London as a comparison:
- London lives a lot later. London lights up at night, from 6 pm until midnight on weekdays, and until 4 am on weekends.
- In London, Uber is not as popular for morning commutes: a lower proportion of London’s rides occur in morning commute windows compared to New York City.
Some additional observations made from this data:
- London and Miami are both nocturnal cities.
- San Francisco and Chicago are broadly similar, but Chicago tends to concentrate rides in a narrow window of commuting from 8-9 am and again from 6-8 pm from Monday through Thursday.
- Across the board, weekend trips are more concentrated on Friday and Saturday nights than during the day.
- In Los Angeles, Saturday night (Sunday from 12-2 am) is much bigger than Friday night.
This invaluable data gives riders a sense now of when to avoid riding Uber and to consider alternatives, if feasible. I know that I will consider this when planning dinner reservations, or even future flights since I often take Uber to/from the airport.
What are your experiences with Uber surge pricing?
While we are on the topic of trying to save money on Uber, you should check out this worthwhile blog that regularly updates Uber promo codes (or follow their Twitter account). For many of us who already have Uber accounts and used our sign-up bonus months ago, the site seems to only post deals for existing accounts.