Bad news, everyone. Uber is set to introduce its infamous dynamic or “surge” pricing to rides in the City of Buenos Aires. Ahhh, the good times were bound to end eventually. Now you’ll have to think twice about whether to order that Uber on a Friday night.
Why is Uber doing this? Well, the official reason is that it wants to make sure there are drivers available at any given time, particularly when there is higher demand. The goal of this strategy is to get more drivers on the road, but the system is not free of controversy and might mean paying more money for a ride when heading out to the boliche.
What exactly is dynamic or surge pricing? It’s basically an automated pricing strategy. When there are more passengers than Uber drivers on the streets, the price of a ride increases. The idea is that the higher prices of rides will encourage more drivers to go online and to the “surge” area, evening out the supply/demand imbalance and making the price return to normal. Supply and demand: microeconomics 101.
Simplicity aside, however, this pricing strategy has had its criticisms, with controversy flaring particularly in emergency situations. For example, in a 2014 attack on a Lindt Café in Sydney Australia, when a gunman held 13 people hostage, the number of people fleeing the area logically increased and the price of an Uber allegedly increased fourfold (although Uber later refunded passengers and established free rides in Sydney in the aftermath).
Plus, surge pricing usually means that prices go up on Friday and Saturday nights and on holidays (Christmas, New Year’s, etc.): although the app does warn you beforehand, make sure to double check. And while you can activate notifications on the app to let you know when the dynamic pricing has ended in your area, it does mean that you’ll have to think twice about that 5 AM bajón run.
Hopefully the strategy will have its proposed objective, which is to effectively get more drivers on the road. It still won’t change the fact that Uber drivers in Buenos Aires have faced severe retributions from taxi drivers in the city and had run-ins with law enforcement since the app reached Argentina in April.