Uber has been the focus of several articles today about the service on New Year's Eve, when the company implemented a form of dynamic pricing (called "Surge Pricing" by the company), by adding surcharges to the fares at around midnight and after. Here are a couple links to stories:
All Things Digital: http://allthingsd.com/20120101/uber-ceo-responds-to-new-years-eve-complaints-considers-dynamic-pricing-for-weekends/
Here's a link to Uber's blog explaining the Surge Pricing: http://blog.uber.com/2011/12/31/nye-surge-pricing-explained/
My NYE Uber Experience
This was my first experience with Uber. We had signed up for the service previously and downloaded the app, but had never used it before. I like to test the services of venture-backed companies, and it seemed that NYE would be a perfect time to test Uber.
8:45 pm. I used the Uber service on New Year's Eve at a little before 9:00 pm in San Francisco. Using my iPhone App, I identified my location and requested a car. Surge Pricing wasn't in effect at that time. The car arrived literally within a minute and was a late-model town car with a very professional and amicable driver. He drove us to our destination, and as payment is all done through the Uber website (a credit card is stored at the website), no money changed hands, and the tip is included in the price of the fare. Our trip was short and our fare was the minimum $15 fare. All in all, I was very pleased with this experience.
11:00 pm. I tried using the Uber car service at a bit after 11:00 pm and the Uber App on my iPhone notified me that Surge Pricing was in effect and that the surcharge was a 5x charge on the price of the fare. As the minimum fare in San Francisco is $15, this meant that the minimum charge for a short ride would be $75. We found a taxi quickly and our fare was about $10 with tip.
After 2:00 am. The party was winding down, and Surge Pricing was still in effect. For a short ride home, $75 seemed excessive, and so we caught a ride with a friend.
Conclusion. When I used the service, Uber worked well. In addition, dynamic pricing worked (from an economics perspective) with me. At 8:45 pm, $15 for a short trip was a go. At 11:00 pm and 2:00 am, $75 for a short trip seemed excessive, and we found suitable and readily available alternatives. I don't have a problem with dynamic pricing, and given how pleased I was with the Uber service at 8:45 pm, I will certainly use them again. However, I will be mindful of the potential of dynamic pricing and will make sure to have other options lined up (taxi company apps, perhaps?).