RIDEGURU
Riders are more accepting of surges that are NOT round numbers, because consumers feel more thoughts went into the calculation of the surge pricing. This was shared on an interview at NPR, where Uber's economist shared a factor in when people are accepting of surge pricing.
From an Uber rider's perspective, Keith says, a round number surge like two times looks like the company is just slapping on a higher price tag because it's raining. But when it's 2.1 times as much, we think there must be a complex algorithm (which there is) coming up with that figure. The ride, then, is surely worth 2.1 times as much. (source)
Similar research with eBay:
Economists found sellers who priced their goods with round numbers (i.e. $50 instead of $49) sold their items quicker. The researchers hypothesize that round numbers signal the sellers' impatience to sell and, thus, their willingness to accept a lower price. In other words, round numbers signal carelessness or imprecision.
Comments
Interesting that people would do that. If I was ordering an Uber and seen a surge I dont care what the multiplier is. I am waiting for it to go away or to get lower. My question is do riders see on their app that surge is 2.0 X, 2.1 X, etc...? I know on the dollar amt. riders do not see that there is a surge. They only know it's surged if they normally take that route and price is higher than usual. Uber doesnt breakdown the price for the rider showing a surge. In area when surge is still multiplier do riders see how much the surge is? In reality I would wait out the surge if ride was really expensive.
That's correct! Uber's rider app no longer shows the surge pricing multiplier - in all regions. This has been replaced by "upfront pricing" as Uber claims that it eliminates confusion and encourages users to keep using their apps.
So they figured people rather not know when the price is surging. They just prefer knowing what the price will be.
They removed the lightning bolts for the surge prices as well. Great point.
I live in Philadelphia and 2 blocks from Bucks County (Bensalem PA). I believe we went to dollar amt. between May 2018 - August 2018. I get trips into NJ and they are still going by multiplier surge. The highest I've seen is 2.8X. I ended up in Princeton a few weeks ago when they were having their annual reunion. I was not aware of this at the time. I was headed back on 295 when my phone was blowing up with surged rides including a few Long Trips with multiplier surge. Their rates are lower than Philly. .87 Base Fare, .66 per mile, and .1725 per min. Not that Philly's rates are much higher.
That seems low, but the capitalism plays out. As long as there are still people willing to drive (and enough of them), Uber will continue to lower the prices.
I am pretty new to this whole rideshare thing but those prices for Princeton are crazy low. .87 cents, .66cents etc. WOW! I can't understand how this would ever be profitable.
WHAT THE HELL
Huh, it is almost like the .99 concept.
But the irony is that on a site like eBay, people were likely to buy more if it’s $1.00 than $0.99
Are riders seeing multipliers even though the driver sees a flat dollar amount for the surge?
The opposite happens. Not sure about what you said.
On a similar topic, do riders even see surges as multipliers anymore? Or is it all upfront pricing?
Another crazy tactic taken by Uber.
If they do this, I don't know what else they do to artificially kick up the fares. I just created a thread to share some of the suspicions we have on how Uber does this.
https://ride.guru/lounge/p/ubers-tactics-to-set-higher-fares-and-surges-share-your-suspicions-angry-riders