For Uber, Demand Has A Finite Window

Uber’s car-on-demand service has been a darling of the tech industry for quite some time now.  Their logistics system seems destined for life beyond the Black town car and UberX ride share products.  But lately I think about exactly how Uber can move beyond its core product without alienating its core customers.

First, a brief bit about my own experience.  I have been an Uber user/fan since the first time I visited San Francisco back in April 2011.  And I’ve used Uber exclusively the past 26 months while traveling for work.  But lately I’ve grown tired of the surge pricing model.  The Uber Surge Price Gouging story has been documented ad nauseam and I won’t repeat the details here.  My first brush with “demand management” was in Chicago during a rainy evening rush hour.  Couldn’t use the Uber app to hail a taxi and the UberX/Black car options were both useless because of exorbitant surge multiples.  Since that first rainy experience with Uber Surge I’ve witnessed many more “periods of peak demand.”

Fast forward to yesterday.  Around 8:30am PST I went to hail an UberX but was surprised to see surge pricing on a Tuesday morning in February.  I ended up hailing a old school taxi and to my surprise that experience didn’t stink.  Once I landed at my destination I curiously checked to see if surge pricing was still in effect for UberX.  I was kind of surprised to see all of a sudden, not even 10 minutes later, demand had suddenly disappeared.

Now, my aim here isn’t to deconstruct the Uber algorithm, but rather to ask a simple question.  Last night I ended up at Golden Gate Taproom next to Union Square.  Once I’d had my beer (or two) it was time to head back to the hotel.  Opened up Uber and this is what I saw:


 There were about 6 or 7 UberXs on the road but apparently demand was spiking and Uber’s system needed to get more vehicles out there.  I kept checking for the next ten minutes but all I kept seeing was this splash screen:


Not an outrageous surge price but was still too high for me.  Now, it’s important to note this whole time I had been texting with my cousin Kyle (@nowlink), another nonfan of Uber’s surge model.  He suggested I check again at 8pm on the dot to see if demand “suddenly disappeared.”  I was a minute off, but imagine my shock when I saw this:


Huh.  I guess the “Demand is off the charts!” period conveniently ends at 8pm.  Therein lies my issue with Uber’s surge model.  Is it coincidence demand waned exactly at 8pm on a Tuesday night?  Or is there a finite window for surge pricing?  I find it extremely hard to believe that an algorithm randomly returns the fee structure back to normal at 8pm on the dot.  Maybe I’m being flippant here but I find this surge model a bit wonky at best, and gouging at worst.

I really want Uber to win (for the 20th time, please come disrupt the Cleveland OH taxi market!!) but I will never understand their desire to gouge customers under the guise of Matrix-like autonomous A.I.  So for now, I’ll go old school during the surge.

Ari Paparo Dot Com: 2013 Ad Tech IPO Predictions


Everyone loves a public offering! It’s a coming out party for your favorite company, a liquidity event for your shareholders, and a fun opportunity to dress up and ring a bell. Within the ad tech sector there are a surprisingly large number of companies talking about going public in 2013, so…