Published On: Sun, Dec 21st, 2014

Uber Wants to Patent Surge Pricing

Uber

Uber wants to patent its surge-pricing feature. It is one of 13 items that the company has filed with the U.S. Patent Office and 24 that it has applied for globally.

The service allows drivers to set rates based on what the going demand is. This means that they can, of course, charge more at times than the set rate for taxi fees is according to local regulations. This in turn means more money for Uber which collects a percentage of the fees that drivers charge passengers.

This practice met with controversy this past week in Australia when Uber prices surged during the hostage crisis in Sydney. This is because people in the area of the terrorist attack were desperate for a ride out of there and increased demand meant increased prices.

But Uber defends the practice in a blog post which reads, “Without a surge pricing mechanism, there is no way to clear the market. Fixed or capped pricing, and you have the taxi problem on NYE—no taxis available with people waiting hours to get a ride or left to stagger home through the streets on a long night out. By *raising* the price you *increase* the number of cars on the road and maximize the number of safe convenient rides. Nobody is required to take an Uber, but having a reliable option is what we’re shooting for.”

In other words people should be grateful when prices go up since it means more drivers will be looking to work so there will be more opportunities for people to get a ride. Nice to see that Uber is so altruistic.

The patent application, which is titled “System and Method for Dynamically Adjusting Prices for Services” states, “The system determines or approximates an amount of available service providers for providing the service at the given time. Based on the determined amount of requesters and the determined amount of available service providers, the system adjusts a price, relative to a default price, for using the service provided by one or more service providers.”

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