New Year’s Eve revelers hoping to avoid exorbitant Uber and Lyft fares should steer clear of the services between midnight and 3 a.m. on New Year’s Day, according to the two San Francisco companies, which anticipate rider demand will drive up prices during those hours.
In major cities, the firms also expect high demand and, in turn, high fares, from 8 to 11 p.m. on New Year’s Eve.
Uber this week issued something of a public service announcement to customers after receiving complaints last year from angry riders who were charged hundreds of dollars for New Year’s Eve and New Year’s Day trips that normally would have cost a fraction of the price.
Both services use an algorithmic fare strategy called “dynamic pricing” or “surge pricing,” in which fares change according to supply and demand. Holidays and bad weather have been known to trigger the feature, at times doubling or more than tripling the fare.
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“Our goal is to ensure anyone, anywhere can push a button and get a ride within minutes,” Uber wrote on its blog. “(So) during times of high demand, fares increase (via an algorithm) to help ensure a driver is always nearby and you can get a ride if you need one.”
These price hikes can be a financial windfall for ride-hailing companies and drivers – so long as the inflated costs don’t scare away too many customers. But sudden price jumps can also irk passengers who feel like they are getting fleeced by the services when they need them most.
In a bid to reduce customer complaints, Uber and Lyft introduced in 2016 an upfront pricing feature so customers will know before they book a ride exactly how much it will cost. In a statement, Lyft encouraged customers to use a feature that offers an estimate of the overall fare before booking a ride.
Prior to upfront pricing, customers were shown only the multiple by which their fare would increase, which led to confusion and frustration among passengers who wanted to get from point A to point B without dusting off their arithmetic skills.