In theory, ride-hailing app Uber implements “surge pricing” during times of increased demand for rides and a shortage of available drivers. But there has been a great deal of speculation about whether Uber shows higher fares when it detects low battery levels on a device -- Uber’s app is programmed to transition into power-saving mode when the battery is running low on a gadget.
Should this theory be true, then it would prove controversial for the company. But Uber's head of economic research, Keith Chen, recently addressed the rumor while appearing on NPR’s Hidden Brain Podcast. According to Chen, users with low battery life are more likely to accept a surge pricing.
“One of the strongest predictors of whether or not you are going to be sensitive to surge – in other words, whether or not you are going to kind of say, oh, two-point-two, two-point-three, I’ll give it a 10 to 15 minutes to see if surge goes away – is how much battery you have left on your cell phone,” said Chen, reports Nine News.
While users are more likely to accept higher priced rides, this does not mean the company takes advantage of this situation. “We absolutely don’t use that to … push you a higher surge price, but it’s an interesting kind of psychological fact of human behaviour,” said Chen.
“A variety of circumstances cause fares to surge,” says Uber on its website. “For example, heavy rain, local sports events, and holidays can contribute to a temporary increase in demand for rides that requires surge pricing. Surge pricing has two main effects. Some riders may choose to wait a few minutes or take another form of transportation, causing demand in the area to decrease. Drivers encouraged by surging fares will head to areas where rides are needed most. Once demand for rides returns to normal levels, surge pricing ends.”
