How Uber Will Trick You Into Accepting Surge Pricing and More

News and notes from around the interweb:

  • The new American Express Centurion lounge in Houston opens today. I attended the pre-opening party on Wednesday evening and at the time it hadn’t received all final inspections (e.g. security to allow access airside). Those inspections were completed yesterday so the lounge is open to guests today!

  • Uber is working to replace surge pricing with total trip pricing. Like Delta, there’ll be no more award chart, the price is whatever they quote on any given trip — so it’s no longer 2x, 3x, or 10x. It just is.

  • Man boarding Delta flight home discovers he’s the only passenger.

    I’ve never been alone in a plane, though I’ve been alone in first class. I was one of 3 passengers flying New York – Cincinnati once when I was a kid. And Flying New Year’s morning in 2000 (Y2K!) everyone was so scared that my transcon 777 was empty enough for the entire plane to get upgrades.

  • US airline CEOs are all promising a future of unending big profits but no one believes them. American CEO Doug Parker explicitly calls this a leap of faith for good reason.

  • Iran admits they’re using their announced deal with Boeing to leverage Europe on Airbus.

    Iran’s Foreign Minister Mohammad Javad Zarif said he hopes that Tehran’s deal with Boeing will pave the way for completing another contract with Airbus.

    ..”We thought to speed up our ties with Airbus, we should make a deal with Boeing first. Now we feel the situation is ripe for both,” said Foreign Minister Zarif in a meeting with the foreign affairs commission of the French Senate in Paris, according to Iran’s ILNA news agency.

  • Through September 5 Silvercar is offering 25% off rentals of 4 or more days with promo code SUNSHINE.

    First time Silvercar users get $25 when referred by someone and the referrer does too. As usual you’re welcome to leave your own referral links in the comments.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Very true that Wall Street doesn’t believe Doug Parker when he says American Airlines will remain very profitable. Today, Wall Street is further pummeling his shares because of Brexit, even though BRITISH Airways says it isn’t troubled by the Brexit vote, and Parker will further benefit from skittish speculators now lowering AA’s fuel costs (again). Parker has made his company over $10 billion in profits in the last 18 months, which is quite impressive given that AA’s market capitalization is only $16 billion. Parker is using his billions to buyback the company’s shares. Tell me who you think will ultimately “win.” 🙂

  2. With total trip pricing, Uber is assuming the “risk” for unexpected delays, detours, etc, so presumably the prices will increase a bit, either by a rate increase or by them just estimating high for time & mileage. But UberX’s rates are probably too low to be sustainable anyway, so I’m ok with that part.

    But I’d be a lot happier if they displayed both the price as well as the surge multiplier that it resulted from. As others have indicated, when confronted with a surge, many riders will wait for it to go away, or to at least drop some. If all they give is a price, and if it’s not a trip you take often, you have no way of knowing if the price is the standard rate that you should just accept, or if it’s a temporarily high surge that you might want to avoid.

  3. The point is that with the new UBER pricing model you will not know whether it is “surge pricing”.

  4. i was once the only revenue pax on a 15 minute united flight from san francisco to oakland. there were a number of united employees who were non-revenue, working at oakland but living in san francisco, i assume.

    this was one of those “need a flight segment for an award” situations.

    it was actually hard to get an answer to the question “where is the cheapest place you fly to?”
    (“where would you like to go, sir?” was the inevitable answer).

    the reason they flew sfo to oak was that this plane was serviced in sfo, and then was to be used for a flight oak to somewhere else.

    i was surprised they would price the segment for me. And unsuccessful in persuading them to just accept the ticket, give me the segment credit, and let me not board and have to take the bart back to san francisco.

  5. Gary,

    But aren’t you a fan of demand based pricing? I get this is a marketing thing — telling people that they are paying more when they could be paying less is generally considered to be bad for business.

  6. @Dan I don’t have a problem with surge pricing. i don’t think this should be illegal either! i do think it’s a cheeky way to hide the ball is all 🙂

  7. Taxi drivers the world over must be cracking open bottles of champagne over the Uber change.

  8. @Christian- that makes no sense- this is clearly a tactic that will increase Uber sales.

    For those of us who pay attention, though, there’s still messaging. With the new Upfront fares from Uber, there is a note during surges that says, “fares are higher due to increased demand”

    So no thunderbolts and Xx any more, but honestly I think the new system is fine, and if it’s more granular, makes better sense. With Grab in Singapore, I’ll sometimes see increased pricing at surge times of as little as 20%- whatever it takes to get a few more drivers to take rides in an area.

  9. @George – Pulling a Delta by not specifying the surge surcharge makes the process considerably less transparent. Now it’s a “it costs what it costs ” deal, which is less consumer friendly. If there’s a 10x surge price, let the consumer know. Then they can decide whether to take it or wait. This change makes traditional cabs more enticing.

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