Uber Plans To Kill Surge Pricing, Though Drivers Say It Makes Job Worth It : All Tech Considered Uber is using machine learning to predict high demand, which would allow the app to schedule extra drivers instead of hiking rates at busy times. But such a change would hurt driver pay.
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Uber Plans To Kill Surge Pricing, Though Drivers Say It Makes Job Worth It

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Uber Plans To Kill Surge Pricing, Though Drivers Say It Makes Job Worth It

Uber Plans To Kill Surge Pricing, Though Drivers Say It Makes Job Worth It

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RACHEL MARTIN, HOST:

Ever had that moment? You call an Uber and your $8 ride is all of a sudden going to cost two, three, even four times more than usual. Maybe it's because there's a snowstorm or maybe a ballgame or it's just Saturday night. Whatever the reason, surge pricing is not fun. And now it turns out Uber is working to fix it - or should we say kill it. NPR's Aarti Shahani reports.

AARTI SHAHANI, BYLINE: Nathan Sapp is sitting in his garage.

NATHAN SAPP: It's a little after midnight Wednesday night, Thursday morning.

SHAHANI: He doesn't want to wake up the wife and kids. Sapp just got back home from Ubering. He gave NPR pay stubs for a three-month period. And on average, he drives 42.4 hours a week. Like many drivers, he's got a system in place for finding surge.

SAPP: I definitely keep up with the news regarding events in town. They could be business meetings, conventions. They could be specific sporting events.

SHAHANI: Surge is Uber's solution when demand outstrips supply - alert customers this ride is going to cost more, maybe way more. Take those who say yes; ditch the ones who say no. Drivers, of course, want surge, though the system for getting it isn't full proof.

Sapp doesn't know in advance where any one fare will take him. He recalls one time he planned his day around a big Bernie Sanders appearance.

SAPP: But not 20 minutes prior to the start of the speech, I got a trip that took me 60 miles away.

SHAHANI: He ended up working a completely different, slower city that night. To be clear though, Sapp is not complaining. He gets that's part of the deal. In that three-month period he provided, surge fares were about one-quarter of his total take-home. It boosts his income by nearly $700 a month. That's money to fix his car, pay insurance, take the family out. A day at the museum costs a hundred bucks.

SAPP: That might not be a lot of money to some people. But for us, a hundred dollars is a hundred dollars.

SHAHANI: While drivers see surge as a key feature of the job and Uber advertises it as such to them, inside the company, surge pricing is considered a market failure, a problem to be solved.

JEFF SCHNEIDER: So that's where machine learning comes in. That's where the next generation comes in.

SHAHANI: Jeff Schneider is engineering lead at Uber Advanced Technologies Center.

JEFF SCHNEIDER: Because now we can look at all this data and we can start to make predictions.

SHAHANI: He's on stage with me as Structure Data, one of these Silicon Valley insider conferences. It's a well-known fact in the long-term Uber is working on self-driving cars so there's no need for human drivers. I'm interviewing Schneider about his short-term priorities.

(SOUNDBITE OF BEYONCE CONCERT)

BEYONCE: (Singing) Flexing while my hands up, my hands up, my hands up...

SHAHANI: Think of it this way - when the Beyonce concert lets out, it's a no-brainer there's a ton of demand. Drivers know that. What's harder though...

JEFF SCHNEIDER: To find those Tuesday nights when it's not even raining and for some reason there's demand - to know that's coming. That's machine learning.

SHAHANI: So computer algorithms would do the research that driver Nathan Sapp already does, only better.

JEFF SCHNEIDER: So the surge pricing never even has to happen. And I think that's one of the really cool things that machine learning's doing for Uber right now.

(SOUNDBITE OF BEYONCE CONCERT)

SHAHANI: Right now means he is on it, though Uber hasn't released an exact timeline for the end of surge. And it's not clear if the company plans to make an announcement or just phase it out so that riders, myself included, lose the unpleasant 4X experience but drivers aren't ticked off. Sapp can't say he's surprised when I break the news to him because he sees Uber recruiting nonstop.

SAPP: I get what seems like five to 10 notices every week - invite my friends and family to drive for Uber.

SHAHANI: Uber is competitive because of price. On average, Uber rides are about two-thirds the cost of a taxi cab ride, according to data compiled by Certify. And there's a culture, a norm of changing the rates for drivers regularly. Sapp says he gets a notice every few months.

SAPP: Hey, these are the new rates in your area - the end.

SHAHANI: As part of a class-action settlement, Uber plans to start letting drivers collect tips. It could be that the income lost through surge is replaced by passengers voluntarily giving a bit more. Aarti Shahani, NPR News, San Francisco.

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