Uber's Price Gouging Reaches Obscene Levels

07 January 2016 | NSW Taxi Council

The NSW Taxi Council today condemned ridesharing service Uber for its greed-driven approach to price gouging customers throughout the busy Christmas-New Year period. 

CEO of the NSW Taxi Council Roy Wakelin-King said, “In the week since New Year’s Eve, staggering stories of blatant price gouging by Uber have reached the headlines”. 

“The stories have almost been unbelievable as the amounts of money have become public.” 

“It is truly outrageous that Uber profits increase each time surge pricing is triggered, often to the tune of hundreds of dollars per transaction,” he said. 

The NSW Taxi Council has produced a table of the cost of Uber’s surge pricing compared to the equivalent regulated taxi fare and also how far a passenger could have travelled on a holiday/overseas trip instead of paying Uber’s surge rates. 

Mr Wakelin-King said the results were a shock. 

“The prices paid to Uber on New Year’s Eve could have taken some passengers halfway around the world on an airline flight,” he said. 

“People could have put down a deposit for their own car or gone a weekend cruise ship holiday; it’s really quite staggering when you look at it in this context. 

“Uber’s response has sought to justify and normalise surge pricing as a necessary mechanism to get drivers onto the road.  

“These claims ring hollow when it becomes clear that Uber takes up to 25% of the fare. 

“Surge pricing simply serves to increase the profits of Uber at the expense of the consumer.” 

Mr Wakelin-King said that the recently announced NSW Government reforms to the point to point transport sector did allow for dynamic pricing, but this result was not anticipated. 

“I am reasonably confident that no one other than Uber would have thought that these reforms would have led to this outcome,” he said. 

“Whilst dynamic pricing is a feature of many open market systems, there is also a wider corporate social responsibility that organisations need to consider when implementing pricing policy. 

“There are laws to protect consumers from the excesses of the market and it would be prudent for consumer advocates and regulators to cast a critical eye over the recent surge pricing practices by Uber to ensure that this line hasn’t been crossed.” 

Price Comparisons – Taxis vs Uber on New Year’s Eve

 

Estimated Capped Price Taxi Fare

Uber Surge Price

Where else can you travel on this Uber surge price?

Pyrmont – Manly (17kms)

$46.77

$368.63

Return flight Sydney to Cairns + 3 nights at  luxury 4.5 star waterfront hotel in tropical North Queensland [1]

North Sydney – Woodcroft (41kms)

$111.14

$720.11

Return flight from Sydney to Phuket Thailand with Air Asia including 5 nights at a 4.5 star resort [2]

Sydney CBD – Menai (36kms)

$98.75

$877.89

Sydney to Paris one way via Qatar Airways [3]

Sydney CBD – Wilberforce (61kms)

$164.86

$1046.32

Return flight from Sydney to San Francisco on Air New Zealand to visit Uber head office and complain directly. (You’ll also have enough spare change to book a taxi from the airport.) [4]

 

[1] Sourced from www.lastminute.com on 6 January 2016

[2] Flight and accommodation sourced from www.iwantthatflight.com on 6 January 2016

[3] Quote obtained from www.statravel.com.au on 6 January 2016

[4] Sourced from holiday booking site www.kayak.com.au on 6 January 2016