And for some reason they always seem to go up at exactly those times when you want to buy.  Like Taxis on New Year’s Eve.

Mr. Whaley was using Uber, a service that allows people to order livery cabs through a smartphone application. On New Year’s Eve, Uber, a start-up in the city, adopted a feature it called “surge pricing,” which increases the price of rides as more people request them.

Although New Year’s Eve was very profitable for Uber, customers were not happy. Many felt the pricing was exorbitant and they took to Twitter and the Web to complain. Some people said that at certain times in the evening, rides had spiked to as high as seven times the usual price, and they called it highway robbery.

Informing passengers only ex post may not be the ideal way to implement it though.

Uber’s goal is to make the experience as simple as possible, so customers are not shown their fare until the end of the ride, when it is automatically charged to their credit card. While the app does not show the total fare in dollars when customers book a ride, Uber did show a “surge pricing” multiple to customers booking rides for New Year’s Eve.

The article is an interesting read if for no other reason than the quotes from Dirk Bergemann and Liran Einav.  Thanks to Toomas Hinnosaar for the pointer.

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