It’s the curse of modern commuting. While Uber and other ride sharing apps have made getting around easier than ever before, there’s one time when they don’t do so well – after an event or on peak days. So if a cricket match has just got over, and lots of people want to take rides together from the same area together, Uber can display some ludicrously high fares.
Now there’s a theory how these prices might end up being so high.
Michael Hendrix, who works for the US Chamber of Commerce Federation, says that his Uber driver told him how drivers can artificially inflate surge prices. If a big event finishes, and lots of people will soon need cabs, drivers around the area turn their apps off in unison. The Uber algorithm detects that there are no cabs in the area, but see lots of people who are looking for cabs. It then raises prices to incentivize more drivers to come to the area. But the drivers are already there – all they have to go is switch on their apps, and end up taking passengers at the higher prices.
It sounds like a genius plan, and could well work. Lots of people who drive Ubers were formerly parts of taxi unions – it wouldn’t be impossible that drivers who operate in a particular area know each other, and would be able to coordinate this. And this trick could well have spread among the driver community.
While this specific incident is from the US, (and to be fair, there’s no proof, apart from the account of Mr. Hendrix), it wouldn’t be inconceivable this is happening in India. People who’ve regularly used cab hailing apps in India would be familiar with requests from drivers to make a fake booking immediately after their rides and then cancel, helping them reach their daily quota of rides. Several drivers in India are clearly scamming Uber and Ola – it wouldn’t be too much of a stretch that they’re scamming consumers too.
Maybe Indian states which fought against surge pricing did have a point after all.