Some revellers found that a Uber ride home from the New Year fireworks cost more than the air fare to Bali. Trips from the Sydney city centre to the outer suburbs ran up bills in the hundreds of dollars - and in one case the trip exceeded a thousand. Uber fares are subjected to a "surge " basis of price increases that are levied on the demand for taxis. When demand for service is high, the price rises accordingly.
That is not what we are used to from the regular cab industry. The city cab fleet is equipped with meters and the rising cost is shown on that meter as the kilometres are travelled. Uber cars do not have meters and the charge is calculated in the Uber control room - and added to the passengers credit card.
Uber claims that the journey price is advised at the time the Uber car is booked, but many people dispute this and claim that they had a degree of confusion on exactly what was involved. On new year's eve many would have been celebrating and perhaps alcohol may have disturbed clarity, but we certainly need adequate legislation to ensure that the pricing is crystal clear before the start of each journey.
There is a degree of logic in "surge "pricing because higher fares will induce independent Uber drivers to get in their cars and provide a service at times when cabs are in short supply, but a lot depends on what method is used to determine the degree of surge - and how long it will apply.
Obviously, when the last fireworks flare over the harbour bridge on New Year's eve a huge crowd of people are trying to make their way home and cab demand is probably the highest all year - but for what period of time ? Within an hour many have used public transport - and many more are sleeping on the beaches or in parks - but has that cab fare remained at absolute peak, or has it diminished on some sort of time scale ?
We all know that a sudden shower of rain causes many people to seek a cab, but rain is usually localised - and it is unclear how widely a "rain surge "in pricing applies across the city, and whether it will be added to the price of a fare when a journey is part complete. It seems that application of surge components is entirely at the discretion of Uber management located somewhere in a central control room.
The taxi industry we knew was heavily controlled by legislation. Drivers needed to wear a uniform and display their identity and the cars clearly carried signage - and those meters made the price of each journey abundantly clear.
Uber is an entirely new concept and when it started giving service it was an intrusion on existing laws, and now it has legal sanction it is still being legislated into a new form of the taxi industry.
Some will see surge pricing as a form of price gouging. In quiet times, the Uber service promises to undercut the traditional taxi industry and steal fares, but the moment demand strengthens the price rises - and at peak can go to levels more appropriate to the airline industry.
The government is the arbitrator between these two branches of the taxi industry. It needs to impose clear rules on Uber on how and when fare prices will be disclosed to it's customers, and reasonable limits need to apply to how far fares can rise at maximum peaks.
A thousand dollar charge for a cab ride within Sydney seems to be stretching the price barrier beyond breaking point !
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