01/02/15 @1:23pm in City News
Boston New Years Eve A Flop For Some Drivers
Despite expecting to see a number of trip requests on the "busiest night of the year," Uber drivers in Boston and San Francisco say their business flopped on New Year's Eve. Drivers in both cities blame surge pricing, suggesting Uber's demand-driven pricing algorithm prompted an excess supply of Uber drivers to hit the streets.
"When there is oversupply, as we see with [Uber and Lyft], more and more drivers are competing for the same number of riders," cab driver and former taxi official Trevor Johnson told The Examiner.
Uber's controversial surge pricing model – which raises fares when trip demand is high, to prompt additional drivers onto the platform, Uber says – may have worked to the advantage of riders on New Year's Eve, at least in terms of being able to find a ride quickly. One San Francisco Uber driver told The Examiner that riders may have been scared off by the threat of surge pricing.
Other Uber drivers, however, suggested that surge pricing wasn't necessary because there were enough drivers to begin with.
Oversupply is an issue that hasn't made too many headlines. But with Uber aggressively trying to recruit new drivers to its platform, specifically during the lead up to New Year's Eve, it seemed only a matter of time before this would become an issue.
"I just pulled up my passenger app and there's about 10 [Uber drivers] within three blocks of me (and I'm not even in the most dense business area)," one Uber driver (apparently in Boston) commented on Uberpeople.net.
"If there is more demand (passengers) than supply (drivers) then there will be surge pricing," another member commented. "The only thing [Uber] wants to avoid more than bad publicity is losing passengers (income) because they don't have enough drivers at non-surge prices to pick them up. There WILL be surge pricing if enough drivers wait for it."
But, for some, it doesn't appear that was the case. After working five and a half hours, and despite the fact that surge pricing was in effect, another Boston Uber driver suggested the night was hardly a success:
Worked from 10 pm till 3.30 am made $ 160 before uber cut, tech fee and gas. hundreds of uber drivers everywhere i looked, took rides in the middle of the surge and no surge charge wtf?? uber is definitely not charging people enough and those customer will pay more and continue to use uber because they hate cabbys.
It was a "disappointing" New Year's Eve, another member commented:
we were promised gold we got coal. It's sad we all have to depend on Surge . What we r truely saying is rates need to go up can't live in Boston with these rates. Thats why the city governs these rates in the taxi industry.
The apparent New Year's Eve-angst among Boston drivers is similar to what San Francisco drivers were feeling. "I worked ten hours for NYE in San Francisco. I could have made more last weekend during a normal Saturday night," one commenter on Reddit's UberDrivers forum wrote, according to The Examiner. "Uber has left me financially devastated trying to work with them."
Public transit alternative
If Uber riders did, indeed, try to escape surge pricing, it's probable many of them took public transportation. MBTA subway and buses offered free service after 8 p.m., and MBTA spokesman Joe Pesaturo said that hundreds of thousands of people took advantage of the free service.
Uber provided two million trips on New Year's eve, the company said in a blog post. Uber credited "a team of more than 2,000 employees and hundreds of thousands of incredible driver partners" for their work.
The fact that Uber drivers may have received fewer trip requests and missed out on surge-pricing fares doesn't suggest necessarily suggest that fewer people used Uber on New Year's Eve than other nights; an increase in the number of available drivers could have meant there there was more than an adequate supply to meet normal user demand, which would have prevented surge pricing from going into effect. Either way, at least some Uber drivers appear to have struggled on what was supposed to be a big moneymaking night.
Cab drivers know that feeling all too well.