# Ubers business model is to eliminate Surge



## Jaxjohnny (Apr 16, 2016)

Their business model is to eliminate surge. What they don't understand is there going to lose millions of dollars by doing this. They would rather take care of the public and offer them a "safe ride" with non-surge rates and that will get more riders. That is so shortsighted. The public has a choice to pay the rate or not. They have a choice of either taking a taxi or Uber. These bozos think by eliminating surge they're going to gain more business because people won't in their minds flock away from the service. What's going to happen is there going to lose millions of dollars by keeping the surge down. What can you do as a driver? Well in my case I'm simply not going to drive unless there's a surge. It costs more. I would rather use Lyft who pays more for non-surge. But we can play Uber's game. Post those little signs in your car that say tips are appreciated but not required. If people don't tip me on anon surge I will give them one star. Just the way it is. All of a sudden you're going to see more and more riders with bad ratings then Uber will take notice


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## 20yearsdriving (Dec 14, 2014)

Jaxjohnny said:


> Their business model is to eliminate surge. What they don't understand is there going to lose millions of dollars by doing this. They would rather take care of the public and offer them a "safe ride" with non-surge rates and that will get more riders. That is so shortsighted. The public has a choice to pay the rate or not. They have a choice of either taking a taxi or Uber. These bozos think by eliminating surge they're going to gain more business because people won't in their minds flock away from the service. What's going to happen is there going to lose millions of dollars by keeping the surge down. What can you do as a driver? Well in my case I'm simply not going to drive unless there's a surge. It costs more. I would rather use Lyft who pays more for non-surge. But we can play Uber's game. Post those little signs in your car that say tips are appreciated but not required. If people don't tip me on anon surge I will give them one star. Just the way it is. All of a sudden you're going to see more and more riders with bad ratings then Uber will take notice


Uber said the "surge" invention was super marvelous
They patented such a great invention

Now they want to kill it LMAO!!


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## MulletMan (Mar 2, 2016)

When they kill the surge is when i keep app off. Two almost identical trips, one was fun and one was not.


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## Bob Reynolds (Dec 20, 2014)

Why not just put the fares at the proper rate in the first place and eliminate the surge nonsense?


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## sporadic (Jan 20, 2016)

Because cheapskates won't want to pay proper rates. By having a reduced total trip count, Uber loses out on the Booking Fees. They don't care who the rider is, which is why riders don't need to have photo identification, but they want the rider's money. Low fares = higher demand = more Booking Fees. Also, since it costs them exactly $0 to lower the fares, as long as they can take their 20-28% commission they'll be pretty happy.

Unfortunately they didn't count on the fact that some drivers can calculate their actual costs and profits and call BS on their "lower fares =higher earnings" promotions. We're supposed to be gullible grunts who can't count and who wouls willingly accept 20 min ETAs pings for minimum fare trips.

Else we might "lose access to the platform", even if we're "not Uber employees" and are theoretically allowed to pick what trips the great technology company sends our way!

If rates were higher, you wouldn't see cheapskate entitled pax demanding water/mints because they wouldn't want to pay for that service, even though every car would be stocked with that and every driver would be giving them out voluntarily.

You would also see a greater number of polite people who don't look down on drivers as if they are beggars. Here in Melbourne (Australia) taxi rates are 1.5-1.8x UberX rates, so nowadays I only go online at >1.4x surge because I know that the working adults are willing to pay those rates, but the entitled cheapskate pax are not.

Also, the working adults have been around for longer and have experienced taxi rates even before Uber came online in Melbourne, so I reason that a 1.4-1.8x surge is "normal" pricing to them. The end result? At these surge rates last week, I got polite, well mannered adults who just wanted to get somewhere for a lunch party or a dinner night out where the public transport system sucks, they don't ask for water or mints and they boost my 5* ratings. 2 weeks ago I picked up drunk millenial cheapskates who asked for water and gave me 1* for making a wrong turn at a 5 way traffic junction that added 3 min to their travel time. And 2* from other millenials when I made another wrong turn before finding out that the GPS wanted me to go onto the tollway (which they wanted to avoid). Which scenario is better? Surprisingly, it is the surge scenario.

If rates were higher most drivers would unequivocally state that "it's not necessary to tip" or "the tip is included". Unfortunately Australia does not have a tip culture, so I'm essentially just defining the surge money (less Uber fees) as my tips.

Uber is not aiming to disrupt the taxi industry. It wants to put the public transit services out of business. On demand service, shorter wait times, cheaper than a bus, and sometimes even with mints and water. Just because there isn't any added capital cost to them. The self-driving cars would see a huge increase in the rates for sure once they come online.


Bob Reynolds said:


> Why not just put the fares at the proper rate in the first place and eliminate the surge nonsense?


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## Slavic Riga (Jan 12, 2016)

sporadic said:


> Because cheapskates won't want to pay proper rates. By having a reduced total trip count, Uber loses out on the Booking Fees. They don't care who the rider is, which is why riders don't need to have photo identification, but they want the rider's money. Low fares = higher demand = more Booking Fees. Also, since it costs them exactly $0 to lower the fares, as long as they can take their 20-28% commission they'll be pretty happy.
> 
> Unfortunately they didn't count on the fact that some drivers can calculate their actual costs and profits and call BS on their "lower fares =higher earnings" promotions. We're supposed to be gullible grunts who can't count and who wouls willingly accept 20 min ETAs pings for minimum fare trips.
> 
> ...


And our elected Public officials & Politicians cannot see that Uber is competing with Public Transport & on the verge of eliminating it. Naturally Uber is doing the same Taxi medallions & cab owners did for years, lining Politicians pockets.


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## uberdriverfornow (Jan 10, 2016)

You guys don't find it the least bit coincidental that they are talking about ending surge shortly after Travis got hit with the price fixing lawsuit ?

It's not a coincidence.


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## UofMDriver (Dec 29, 2015)

Jaxjohnny said:


> Their business model is to eliminate surge. What they don't understand is there going to lose millions of dollars by doing this. They would rather take care of the public and offer them a "safe ride" with non-surge rates and that will get more riders. That is so shortsighted. The public has a choice to pay the rate or not. They have a choice of either taking a taxi or Uber. These bozos think by eliminating surge they're going to gain more business because people won't in their minds flock away from the service. What's going to happen is there going to lose millions of dollars by keeping the surge down. What can you do as a driver? Well in my case I'm simply not going to drive unless there's a surge. It costs more. I would rather use Lyft who pays more for non-surge. But we can play Uber's game. Post those little signs in your car that say tips are appreciated but not required. If people don't tip me on anon surge I will give them one star. Just the way it is. All of a sudden you're going to see more and more riders with bad ratings then Uber will take notice


In Michigan the rates are so low, it would be hard to keep drivers on the road without surge. Especially UberX rides.


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## UofMDriver (Dec 29, 2015)

uberdriverfornow said:


> You guys don't find it the least bit coincidental that they are talking about ending surge shortly after Travis got hit with the price fixing lawsuit ?
> 
> It's not a coincidence.


Uber IMO would have to raise rates to kill the surge. Or the quality of the service would drop way down. Area of the country where rates are below a 1.00, simply doesn't make sense to do UberX rides. Especially in my area where Uber also hits new drivers with 28% commission fees.


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## Zena (Jan 29, 2016)

JaxJonny 


Jaxjohnny said:


> Their business model is to eliminate surge. What they don't understand is there going to lose millions of dollars by doing this. They would rather take care of the public and offer them a "safe ride" with non-surge rates and that will get more riders. That is so shortsighted. The public has a choice to pay the rate or not. They have a choice of either taking a taxi or Uber. These bozos think by eliminating surge they're going to gain more business because people won't in their minds flock away from the service. What's going to happen is there going to lose millions of dollars by keeping the surge down. What can you do as a driver? Well in my case I'm simply not going to drive unless there's a surge. It costs more. I would rather use Lyft who pays more for non-surge. But we can play Uber's game. Post those little signs in your car that say tips are appreciated but not required. If people don't tip me on anon surge I will give them one star. Just the way it is. All of a sudden you're going to see more and more riders with bad ratings then Uber will take notice


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## Zena (Jan 29, 2016)

JaxJonny, you have a great idea. I am going to start doing just that. Put that sign up and if not I am going to give them a 3 rating or less. Today was my second Friday I have not seen any surges in all of my area and i basically worked for peanuts at $10/hr and accepting every ride. Since there were no surge areas on map, I was basically sort of in the dark where the demand was. It has been pretty discouraging driving and putting so much mileage for $10/hr.


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## I_Like_Spam (May 10, 2015)

Zena said:


> Since there were no surge areas on map, I was basically sort of in the dark where the demand was. .


If there were no surge areas, that means there was no unmet demand, a sufficient number of drivers everywhere in your area.


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## KMANDERSON (Jul 19, 2015)

Jaxjohnny said:


> Their business model is to eliminate surge. What they don't understand is there going to lose millions of dollars by doing this. They would rather take care of the public and offer them a "safe ride" with non-surge rates and that will get more riders. That is so shortsighted. The public has a choice to pay the rate or not. They have a choice of either taking a taxi or Uber. These bozos think by eliminating surge they're going to gain more business because people won't in their minds flock away from the service. What's going to happen is there going to lose millions of dollars by keeping the surge down. What can you do as a driver? Well in my case I'm simply not going to drive unless there's a surge. It costs more. I would rather use Lyft who pays more for non-surge. But we can play Uber's game. Post those little signs in your car that say tips are appreciated but not required. If people don't tip me on anon surge I will give them one star. Just the way it is. All of a sudden you're going to see more and more riders with bad ratings then Uber will take notice


Uber bussiness model to eliminate surge only works, if the drivers bussiness model is to drive non surge.


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## ColdRider (Oct 19, 2015)

Can't wait!!


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## Huberis (Mar 15, 2015)

Bob Reynolds said:


> Why not just put the fares at the proper rate in the first place and eliminate the surge nonsense?


It is the mechanism they use to modulate the number of cars on the road at anyone given time. Their is much about the entire schema which is broken. It may be best to assume much of what drivers moan about in relation to rates are mostly side efects of greater problems.

Those problems being:

Drivers are proclaimed independent contractors, but they have zero agency, no decision making for them.

Uber corporate is not in anyway linked to the responsibility of fleet ownership and the various associated cost of those vehicles. Those costs are not a factor in determining new drivers or the setting of rates.

Uber is in no way expected to follow any kind of guideline, there is no regulatory oversight with respect to how prices are set.

In a new market, for six months, rates tend to equal lowest price local taxi company. Once a base of drivers and pax are built, they permit the surge with a modest cap such that pax don't feel too gouged. Once another threshold of stability is reached, they may raise the cap on the surge.

The idea is to attract more and more drivers.

Eventually, the number of drivers reaches a point where rates and surge collapse. The surge is self defeating, it guarantees too many drivers for their own good and that rates will wind up in the basement.

Your question/suggestion of setting a fare sustainable rate and being done would be a great solution, but could it ever work?

- for one, I don't believe there is any technological advantage owned by Uber which makes them convenient for pax: They simply throw tons of cars at the problem. They aim to please during absolute peak hours when demand is extraordinarily high. It requires an amazing amount of cars to satisfy peak demand in certain markets.

- They really do need some sort of mechanism to get some of those people off the road, most of the time. The problem is, you wind up with a massive eager workforce who are only needed 6 0r 7 hours any given week who might feel more comfortable working 20 hours a week (just for arguments sake)....... There isn't enough to go around. It isn't sustainable.

If rates were real, sustainable, what would that be? Every driver has a different car and set of costs. People often suggest 75% of local taxi rates is fare for Uber to charge. It isn't that simple.

*The rate woes drivers express are real, but they are one symptom of many representative of bigger, tougher concerns. *


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## MikesUber (Oct 23, 2015)

Huberis said:


> the number of drivers reaches a point where rates and surge collapse


 Reaching that point $1.75/mile? lol watch out guys


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## Huberis (Mar 15, 2015)

MikesUber said:


> Reaching that point $1.75/mile? lol watch out guys


That's for damn sure. There are about three or for drivers from the first six months of operation in SC who still seem to pound out the hours with regularity. Most of the regulars from last fall started to fade by late spring semester and for the most part, they seem to be holding off for fall, waiting for the gravy to return. The salad days once again. That said, there are many Uber cars on the road most of the time. They seem to be relatively new faces, some appear to have purchased new cars or relatively old clunkers ( a couple seem over the age limit), I'd assume they would feel obligated to work.

This fall, the football season might have a different energy around it. The money will not likely be as easy as it was last fall for the UberXers. Every Uber driver in the mid Atlantic is likely to have the idea in mind to show up here on weekends.

The total number of drivers will effect the ability to surge, but I believe the pending rate cut is determined by the number of driver they can rely on who live within an hour or less from town, maybe 30 minutes or less...... can't say for sure. Recruiting drivers over summer will give Uber exactly the kind of drivers they need for a base. They need to transition from entitled/spoiled drivers who took last fall for granted. These new drivers coming on over summer prove willing to work for less, there is no question.

SC and Harrisburg, maybe Erie? Are those the only three towns in PA not to take a rate hit?


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## MikesUber (Oct 23, 2015)

Huberis said:


> Every Uber driver in the mid Atlantic is likely to have the idea in mind to show up here on weekends.


 I know right, just doesn't make sense to come from far away. Would take me 2.5hrs from Pittsburgh. That mileage, plus driving back, just to drive a 10-12 hour day. After all is said and done that would be a tiring day and who knows how much profit there would be after I run the numbers.



Huberis said:


> the pending rate cut is determined by the number of driver they can rely on who live within an hour or less from town, maybe 30 minutes or less


 Never thought about that but that's probably a good point. They look at saturation levels then consider editing rates.



Huberis said:


> SC and Harrisburg, maybe Erie? Are those the only three towns in PA not to take a rate hit?


 Not sure honestly I only follow the Pittsburgh and State College boards


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