Thanks to a Toronto Transit Disaster I Finally Get UBER’s Surge Pricing

UBER Surge Pricing in Toronto

At the start of rush hour this past Monday morning Toronto’s Transit System failed, and failed hard. Just after 5:30 am the radio communications system went silent, and as a result service on all four subway lines was halted until after 7 am. Shuttle buses could not be brought in as they too rely on radio communications, so thousands of commuters were pretty much stranded.

Enter UBER, who made some headlines of their own for seemingly taking advantage of the situation with surge pricing. UBER says that once they learned of the TTC shutdown they capped their fares at 3x the normal rate; the screen grab you’re looking at (via Twitter) says otherwise.

Anyway, there is actually a reasonable explanation for UBER’s exponentially raised rates, which I didn’t fully understand until I read a statement they released later that day:

As a result of our pricing system, we were able to bring out 77% more drivers this morning compared to average Mondays in May – meaning thousands more people could get to where they needed to go

In other words, while surge pricing may be an opportunistic cash grab, it’s at least a cash grab that the drivers get a piece of. And it’s important to remember that surge pricing does not apply to proper taxis hailed with UBER—that is, if you can find one when surge pricing is in effect.

I have confirmed with at least two drivers that they do indeed get a cut when surge pricing happens. If more drivers get out on the road and demand is met, then the system obviously works.

Too bad the same can’t be said for the TTC. ಠ_ಠ

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