Delhi's Odd-Even plan: Surge pricing makes Monday morning Uber/Ola ride expensive

Office goers have ended up paying almost three times of what they pay on other days

For Delhiites, Monday morning ride to office in app-based cab aggregators like Uber and Ola has been quite an expensive proposition as demands have swelled due to the city following the Odd-Even rule till April 30.

Thanks to the ‘surge’ in cab fares on these two services, office goers ended up paying almost three times of what they pay on other days. With the city following odd-even rule for the next 15 days, experts believe the trend is set to continue.

The ‘surge’ as these cab aggregators call it, kicks in when there is an increase in demand at any given time. It can range from zero which is no surge to as much as four times that of the fare during peak hours.

 

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The claim that these companies make is that the surge in cab fares is not controlled by them, but by an algorithm which automatically decides the price according to the demand at any point.

“We do not have any control over surge; we are not dictating it as it is a pre-set algorithm at play. Also surges stay for a brief period of time and users are given an option for not opting for it,” said a senior executive of a cab aggregator.

According to uberestimator.com, Uber fare rates automatically increase, when the taxi demand is higher. “The Uber prices are surging to ensure reliability and availability for those who agree to pay a bit more. You can be notified by the app when the Uber surge pricing goes down again. When the Uber prices are surging, it also encourages more drivers to get back on the road and be able to earn more money. Usually, the Uber surging only last for a few minutes depending on the demand and the amount of available drivers in your area,” it states on the website.

It further states that Uber price surging happens often at peak times in the morning and again in the evening rush hours when everyone is heading back from work. “So if you want to save some money try to avoid rush hours, crowded places or by being a bit patient before booking an Uber ride,” it states further.

However, industry experts claim that it is a ploy of the companies to earn extra as surge in prices directly benefit the company. “A surge in price directly benefits the company. They first create an artificial scarcity and then cash in on the demand. While they claim that the algorithm is what controls the surge, it is written by a human being and is something which can be programmed to cater to the company’s needs,” said Siddhartha Pahwa, CEO, Meru Cabs.

Various state governments have been up in arms against the ‘surge’ concept and are trying to tackle the situation. The Delhi government had earlier said that app-based taxi operators will be restrained from levying ‘peak time charges’ when the second round of the odd-even scheme will be in force.

Delhi chief minister Arvind Kejriwal said in a tweet on Sunday that the state government is planning “strong action” against these companies after receiving complaints.

Karnataka transport department has also said that the crackdown on ride-hailing services Uber and Ola for surge pricing would be stepped up. The transport department had seized around 30 cabs belonging to both companies for allegedly charging consumers more than the maximum Rs.19.50 per kilometer allowed by the state government.