Uber “Flunks" The Better Business Bureau Test Because Consumers Don’t Like Surge Pricing

According to the New York Times, Uber Flunks the Better Business Bureau (BBB) Test because of 90+ complaints filed over the last 3 years. Has Uber really "flunked," or do customers just not like surge (i.e., variable) pricing?

Frustrations with Surge Pricing. According to the BBB:

Consumer complaints allege misunderstanding Uber Technologies' pricing, being misinformed about the overall cost of the services rendered, and not being made aware of "surge pricing," or temporary increases in the company's charges. Some consumers claim that they were told the final cost of the transportation service the company provided (through Uber Technologies' phone app, the driver, and the consumer's receipt), only to be subsequently charged a substantially larger amount.

The NYT quotes one customer who said, “I never knew about surcharges until after the fact and was unaware, confused and uninformed.”

Uber Gives Customers the Price Up Front, So Where’s the Confusion? As I explained in “Uber.Must.Be.Stopped.” Really? I Don't Think So…:

Why is demand for Uber growing? Because uber reduces uncertainty by giving customers the price upfront, by indicating when the driver will arrive to pick them up, and by providing information on the driver before they get in the car.

Indeed, Jed, from Washington DC, who commented on the article on the NYT’s web site says exactly the same thing:

I'm no Uber shill, but I don't understand the complaints about surge pricing. I open up the app, and if there is surge pricing in effect, I immediately have a popup message saying a: that surge pricing is in effect; b: saying what the surge pricing is (1.25x, 1.5x, 2x, etc.); and c: saying what the minimum fare is. I have to click that I accept the surge pricing to go any further.

On top of that, the app lets people enter a destination address and get a fare estimate. The estimate is usually pretty accurate (I've never had a fare go more than $5 above the estimate, and hardly ever outside the estimate).

Buyer's remorse isn't something that Uber should have to answer for.

To be fair, the NYT also reports that, “Uber’s largest competitor in the hail-a-ride market, has also been given an “F” grade by the Better Business Bureau, though the company has received only five complaints through the site in the last three years,” noting that, “Lyft employs similar pricing models and warnings in its smartphone app.”

Read through the complaints to judge for yourself. While there are some reports of fraudulent charges to credit cards when Uber was not used (welcome to the club, folks, credit card fraud happens to everyone), by and large it seems that customers don’t like variable or surge pricing.

For more on this issue, see ThatChuckWilliams.com’s prior post, Uber: Why Dynamic Pricing is Usually Not Price Gouging, which explains how Uber’s variable pricing puts more drivers on the road when demand surges by increasing the price that riders will pay when demand temporarily outstrips the number of Uber cars on the road.