Indian Capital Delhi bans Uber's surge pricing India's capital city, Delhi, has banned Uber's surge pricing. Uber increases prices at times of high demand for its services – aka “surges” - citing the laws of supply and demand as justification. But Arvind Kejriwal, chief minister of the National Capital Territory of Delhi, let the city know of the ruling in a pair of …
There's a simple benchmark test, AC.
Is the supply something that people WANT, like, say, shiny jewels, luxury clothing, flashy autos, etc?
Then it's Supply & Demand.
Is the supply something that people NEED, like, say, food, healthcare, and transportation?
Then it's Profiteering & Extortion.
Surge pricing is a way of both allocating a scarce resource (hire cars when there's excess demand), and providing an incentive to off-duty drivers to go on-duty and increase supply to meet that demand. By all means ban it if that's what your democratically-elected government thinks is right for their people, but do so in the knowledge of the consequences - inability to get a car when you need it, and fewer cars available for hire.
When trains and buses cost more during rush hour their prices are posted well in advance. You don't get to the train station and find out the price is 3x higher than you thought. You can't depend on Uber to get you to work if you don't know whether the price will be 3x higher when you go home than it was the day before.
Pricing - I use cab from airport to my home 4 times a week. The OLA and Uber charges are normally 20% less (anytime), 30-40% less (use of shared ride), 50% less (if any offers is there) for past 2 yrs !!
Surge Pricing - But I agree surge pricing by Ola and Uber is not justified - though it is up to you and not to be complained. I never order if there is a surge pricing and take auto or go on road and take any other transport department authorized 'yellow' / 'blue' / 'private' taxi where I have ended up paying more that probably what I would have paid for surge price - transport department will never check rampant fleecing by these 'yellow' / 'blue' / 'private' taxi in existence for past >20 yrs !! You ask anyone and he will tell you 100s of stories as to how he got fleeced by 'yellow' / 'blue' / 'private' taxis.
Safety - Also OLA/Uber rides are most convenient and safest. Once you order using app on your phone you have the name of driver with his photo, taxi number, model, location and all details on your phone as SMS and also in the app on your phone and this is without any effort and it is also automatically shared with your family. The family or anyone else can log into website from anywhere in world and get details of the taxi you are riding along with your current location. Sitting in Mumbai I have ordered Uber for my 10 yr old son travelling alone from Bangalore Airport using app on my phone, and I got all details, and tracked my son's Uber car till he reached home. I cannot imagine this without OLA/Uber. How much more safe you can be !!
When I take so called transport department authorized airport cab I never know the name of the driver, his taxi number and any other details - the details are there inside on a card displayed but who reads, notes down or remembers till you have problem. And once you have problem you may not have opportunity to note down the details. Only God helps you to get safer ride in so called transport department approved taxi !!
The charge of "looting" is bogus on its face. What Arvind Kejriwal is really saying is that people with more ready cash should not be allowed to outbid others when cabs are scarce. He's dishonestly casting Uber as "looters" to stir up discontent.
What if some woman suddenly goes into labor and must get to a hospital pronto? Is it looting to give that person the opportunity to pay more for a guaranteed ride, or should she wait in line no matter what?
Looting? No. Extortion? Yes. But what do you expect from a black market clearing house of mostly illegal activities? Which is all Uber is. And AirBnB, Lyft, and the raft of others who encourage people to break the law so they can profit from it while suffering none of the risks.
Rock on. Keep the customer at the heart of policy and don't let big biz steam roller your society. Take time to analyse things rather than capitulate to the illogical argument played on the strings of a small violin. Be a beacon for the West. My hat is off to you. ... I know I don't wear a hat these days, but if I did, it would be doffed in your direction.
Indeed. 1000Rs for a westerner to visit the Taj Mahal. A local can get in for 40Rs. The same is true of most government-run tourist sites across India. I've got no problem with paying more but 25x more?
If the Indian government's able to ask people for more money than usual for a service why shouldn't Uber?
It's fairly common around the world to provide a discount for the locals, after all their income is usually far less than the visiting tourists.
1000R is a little over £10, so hardly expensive for a Westerner, perhaps an hours income before tax for most people. I'd have gotten 40p change for two pints out of that in the restaurant I was in last night, and that was in a small UK market town, not 'The City'.
As you say 1000Rs to a tourist is still relatively cheap and no one's going to spend hundreds on a holiday to India and then refuse to pay another tenner to see one of the wonders of the world. But if it's ok to charge certain groups more than the norm "because they're willing to pay more" how is surge pricing any different? People may not like it but they're clearly willing to pay surge prices otherwise no one would and the policy would disappear overnight.
I'm sorry, I thought Uber was just an intermediary and that Uber drivers were not its employees.
If that is the case, then what does surge pricing ability have to do with Uber driver availability ? Am I supposed to think that Uber drivers in India are going to decide not to offer their services because of that ?
Or is it more like Uber is dictating everything and treating drivers like employees on hand, while using wool-over-eyes techniques to avoid supporting the costs of its actions on the other ?
I don't think Uber orders their drivers (self employed as you noted) to get out and pick up people during surges, its the extra money those drivers could earn during surge pricing that gets them out on the road during times when demand is high (a surge in demand)
Most taxi companies do this as well.. try to get a taxi to take you home on christmas day for the same price as a normal monday afternoon :) the extra charge is not just "because they can", but also because othervise the taxi drivers would most likely decide that 1 day off with their family on christmas day is more important to them than an average days earnings.
How important traveling is (with taxi) during a surge dictates wether you'd use uber or not.. thus 2 things are affected: Supply is increased as more drivers chose to work when there is more money to be made, and demand goes down as some people will decided that surge prices are too high and will take alternative means of transport. Those that HAVE to get a taxi (for whatever reasons) will thereby have a greater chance of getting one (even if they have to pay more for it).
Wether you like uber or not, that is the reason for surge pricing.
"What does ownership and regulation by the local community have to do with Uber's surge pricing?"
confusing question, don't know what you mean by ownership, but regulation by the local community in regards to ubers surge pricing affects ubers ability to do surge pricing.
in this case it means less surge pricing which means lower prices and less availability of taxis leading to service scarcity (your taxi will be cheaper if you can find one).
I've generally found the regular taxis and rickshaws in Mumbai to provide good services (outside the tourist areas, at least). They put the meter on without having to be told, normally know where they are going and are available at all hours. There's a good supply to meet the demand, despite the local political party's best efforts to prevent immigrants from plying their trade. I feel sorry for them having to compete with Uber's unregulated competition.
I have no sympathy for their colleagues outside Mumbai. In Delhi, for instance, it's a nightmare trying to catch a cab. If you're lucky then you'll find a driver who wants to go in the same direction as you. But even then, forget about going on the meter - they'll rip you off hopelessly in the negotiations. Uber has been a godsend.
Arvind Kejriwal and his predecessors have done sweet FA about dealing with this, so it's a bit rich of them to go after Uber on this issue. The traffic in India's mega-cities is dreadful on even the best days. If you want drivers to go out during monsoon and festival days then surge pricing will be essential to meeting demand. Competing companies should create a natural market with pricing determined by supply and demand.
This is typical stuff from Kejriwal. He's a child, throwing tantrums when things don't go guess way. He's not stupid and must surely understand the economics underpinning surge pricing, but he's also a populist who relies on gimmicks and getting into the headlines rather than results. He's actually one of the better politicians around here.
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