New Year’s Eve Sydney: Uber under fire for inflated ‘dynamic pricing’ fares

Price hikes: New Year’s Eve Uber users may be in for a shock. Price hikes: New Year’s Eve Uber users may be in for a shock.

Price hikes: New Year’s Eve Uber users may be in for a shock.

Price hikes: New Year’s Eve Uber users may be in for a shock.

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Thousands of Uber drivers will be offering rides at inflated prices on New Year’s Eve, despite government crackdowns on illegal ride-sharing and criticism from consumer groups.

“We are anticipating high demand during peak periods on New Year’s Eve and … dynamic pricing [will be] in effect,” a spokeswoman for Uber said.

Uber is an app-based service that connects users with the closest accredited and unaccredited drivers who can offer rides in taxis or personal cars if both parties agree to a price estimate provided by the application. Dynamic pricing refers to the company’s practice of “algorithmically” increasing prices during times of high demand “to encourage more drivers to come onto the platform”.

Uber has declined to provide an estimate of how much rates could increase on December 31, meaning users could be in for “bill shock”, Tom Godfrey, a spokesman for consumer advocacy group Choice, has warned.

Uber’s holiday and special-event fares are only available at the time of booking, but non-holiday rates for the ride-sharing service UberX are about $1.45 per kilometre or 40 cents per minute, plus a base fare of $2.50.

However, the service recently came under fire for charging more than four times the usual rate to passengers during the Martin Place siege under its dynamic pricing model, with users reporting minimum fare rates of $100 to leave the Sydney CBD.

“The last thing you want to do is be slugged by a big bill on New Year’s Eve,” said Mr Godfrey.

“We saw with the Sydney siege that people need to be aware of how [the Uber] business model works.

“Taxis may have a holiday fee, but it’s still definitely cheaper.”

Standard taxi rates between 10pm and 6am on nights before public holidays are $2.63 per kilometre or 94.4 cents per minute, plus booking-related fees of about $6. Public holidays rates are between $2.26 and $3.75 per kilometre.

Transport Minister Gladys Berejiklian encouraged people to use the “thousands of extra” train, bus and taxi services instead of illegal Uber services.

“Here in NSW we have been very clear that it is illegal for drivers to participate in what we call ‘ride-sharing’ activities like UberX,” Ms Berejiklian said.

Only accredited drivers in licensed vehicles are allowed to provide transport services.

A spokesman for Roads and Maritime Services said: “Several fines of thousands of dollars have already been issued for those breaking the law and enforcement operations and prosecutions are progressing.”

The government raided Uber’s Sydney offices earlier this year and has issued 10 court attendance notices to UberX drivers.

However, Uber continues to be popular with users, with an estimated 11 per cent of Sydney’s population having used ride-sharing services since April.

This will be the third time Uber services have been available on New Year’s Eve since the company launched in Sydney in 2012.

“Previous New Year’s Eves have shown us that…prices remained normal until about 8pm,” said the spokeswoman for Uber.

“From 8pm until 10.30am, we saw an increase that might be similar to a usual busy Friday or Saturday night.

“We experienced extremely high demand, and subsequent increased fares to encourage additional supply, from midnight to 3am.”

While there is no specific pricing policy for Uber in NSW, a cap of 2.5 times the usual price for all Uber services during emergencies was announced by the New York attorney general earlier this year, with a nationwide price cap in the United States expected to follow.

“This is a complex issue and cities all around the world are grappling with it as we speak,” said Ms Berejiklian.

Aneurin Coffey, producer of Sydney New Year’s Eve, was unable to comment on Uber specifically, but recommended public transport as the best option for getting home.

“There will be extra taxis, but I would say trains will be a little bit more efficient,” Mr Coffey said. “[Other queues] just move a little slower than public transport queues.”

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