By Divya Bhati: Ride-hailing companies, especially Uber, are facing a lot of criticism for the constant price surges during rides, regardless of conditions. Many riders across the globe have raised concerns about the exorbitant fare charges imposed by the app. More recently, the issue was directly confronted in front of Uber CEO Dara Khosrowshahi when an Uber user revealed had to pay nearly $52, i.e., around Rs 4,294, for a 4 km trip, including the driver’s tip, across Manhattan, New York.
During a recent interview with Uber CEO, Wired editor-at-large Steven Levy asked Khosrowshahi to guess the estimated fare for a short trip he had from his downtown New York City apartment to the West Side facility. However, the Uber CEO was left shocked upon seeing the receipt of the fare. “Oh my God. Wow,” exclaimed Khosrowshahi upon seeing that the fare was twice as much as the ride for which he had ventured a guess of “twenty bucks.”
But justifying the increasing price, Khosrowshahi says that the rising fare is not something in Uber’s hands as the economy is grappling with inflation. ‘Everything is more expensive,’ he quotes to the publication. Khosrowshahi further attributed the price surge for cabs to inflation and the increased costs of time and labour.
Earlier, Uber’s CEO, Khosrowshahi, had reasoned the soaring prices to a shortage of drivers during the coronavirus pandemic, despite the ride-hailing app reaching a record 5 million drivers in August 2022. However, the reason for the price surge explained by Uber CEO contradicts the company’s statistics revealed by a previous Forbes report. The report reveals that Uber’s prices in the US have increased at four times the rate of inflation from 2018 to 2022, with fares rising a total of 83 per cent over nearly four years.
While the price surge is significant in the US market, in India too, Uber users are witnessing a sharp spike in ride fares even without any conjunction, rainy days, or festive occasions. Many users have reportedly experienced overpriced rides. For instance, a short ride fare for 5-6 kms is seen going up to Rs 300 in metro cities.
This has also further raised doubts around Uber’s policy of fairness and price transparency. Many Uber users and analysts are divided on whether the rising prices are truly a result of inflation or if the company is adjusting its plans to increase revenue. Interestingly, amid all the inflation and surge in price controversy, the company reported a profit of $394 million in its second-quarter performance for the three-month period ending June 30.