Unlike regular cab services, Uber’s prices aren’t regulated. Company CEO Travis Kalanick, who once used Ayn Rand as his Twitter avatar, believes in a free-market approach to fares called “surge pricing.”
That means the higher the demand, the higher the prices. During a recent snowstorm in the Northeast, some customers found fares multiplied by a factor of seven times the normal rate, which the company defends by saying that is how it incentivizes drivers to work during holidays and inclement whether.
That meant some people had to pay up to $35 per mile, with a minimum cost of $175 per ride. Overall, even those who didn’t get hit with the worst of Uber’s surge pricing weren’t too happy about having to spend so much to get through a snowstorm.
Uber has taken steps to prepare potential riders for the impending sticker shock.
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“With surge pricing, Uber rates increase to get more cars on the road and ensure reliability during the busiest times,” the company wrote in a blog post. “When enough cars are on the road, prices go back down to normal levels.”
Kalanick even gave some New Year’s Eve “Uber pro tips” in a video explaining that taking a car between 7:30 p.m. and 10 p.m. or 12:15 a.m. and 3 a.m. is going to cost you a pretty penny.