Why I totally support Uber's surge pricing...

Last Updated: Fri, May 06, 2016 11:36 hrs
Uber

Suddenly all manner of State governments have decided to crack down on the innovative surge pricing introduced by Uber’s taxi service. 

Public transportation still continues to be inadequate in many places. So it is ironic that authorities are showing so much interest in this private transport service that is at best an “add on” to the backbone of public transport.

The governments should stick to managing and making public transport better rather than trying to curb things like surge pricing. A “free market” means letting the “market” go “free” and that’s the only way you will have great innovation.

For one you have to agree that as a concept, Uber is miles ahead of what taxi services have been operating in India. Not only is the driver armed with a smartphone, but the GPS feature has been optimized well for both him and the user. It’s easy to hail an Uber cab and features like a link which can be sent to track the position of the cab to a family member is priceless.

As far as prices are concerned, it’s a simple equation of demand and supply. When the demand is high, the prices will go up. You have to ask the simple question that despite the presence of so many personal cars, public and private buses, Metro services, auto rickshaws and other taxi services, why are people still ready to pay 2x and 3x of the fare amount for Uber?

The truth is that Uber has already emerged at the top of the pyramid and people are ready to pay that much extra for it. Surge pricing also filters out the casual users to leave the service for urgent users during peak time. If an errand is not that important, then you will end up cancelling it.

Surge pricing is great during emergencies. If you had to rush to the hospital or a railway station or airport in the pre-Uber days, at times you really would struggle. 

That’s not the case now when you are assured of a good and prompt taxi service during emergencies if you are ready to pay a hefty premium.

You will also have the likes of Ola and others rivalling Uber in mindshare and you’ll probably have multiple taxi fleets like them and then the surge won’t go that high in the long run. 

Ola autos are also gaining popularity and already charge Rs 10 above the display fare, but it’s worth it.

Right now sometimes you have a surge of 6x to 8x only because this market is being curbed and not promoted.

And it’s not that surge has been introduced by Uber. It’s an old concept though it has not been called that. Auto rickshaws can charge 1.5x during night and end up charging 2x to 3x during emergencies. 

You have to note that the latter is black money much like cinema tickets that used to be sold by touts for many times the actual price during the pre-multiplex days.

Middlemen also push up the price of fruits to vegetables to 10x at times! When we can tolerate an illegal black money surge that does nobody any good, then what’s the problem in backing a white money transparent surge that helps those really in need and is priceless during emergencies?

Even railway tickets have tatkal and premium tatkal. It’s the same thing where people get to travel at short notice during emergencies. In certain cases that may make the ticket price resemble a surge price. Tomorrow tatkal may get even more expensive.

A similar argument is made of multiplexes, but as someone watching movies for decades, one has to say that the quality of cinema watching has gone up exponentially and nothing comes for free. Nothing really good comes at a cheap price.

In fact the real scam in multiplexes is the steep price of popcorn and soft drinks. The problem is that no matter what they label it, they only serve large and extra-large helpings. Small portions are non-existent and even if you are health conscious, you are forced to take a large helping.

Movies may or may not do well, but the popcorn business in multiplexes will always flourish. I use Uber and even I get a bit irritated when a really big surge happens, but I realize that taxi services in India have exponentially got better and will continue to do so if they are all left alone.

If the surge concept was really that bad, then people would have stopped using it long ago and it would have become totally extinct. The State governments should meanwhile concentrate on improving the abysmal public transportation. 

That’s the only thing that will end surges and help the public and not lazy diktats.

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The author is a Bangalore-based journalist and blogger. He blogs here