Uber expects to be busy New Year’s Eve, and its policy of raising rates when demand is high, or surge pricing, is economics 101. Low demand leads to lower prices. Higher demand means a company can jack up prices and customers will still pay.
Defenders of the surge pricing policy say Uber is transparent, warning riders that getting from point A to point B will cost them more. Still, the concept is a new one for many people,so even if there’s no trickery involved, there’s still likely to be pushback from frustrated users whocan’t understand why their car delivery service raises prices, right when they most need a ride.
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In Los Angeles, Uber reports it expects highest demand and highest fares between 12:30 and 4 a.m., with an average ride at 2 a.m. probably costing more than $100.
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