In support of the surge

Uber has attracted a lot of press coverage in the recent past for their surge pricing rules. State governments in India have been pushing the company hard to comply with licensing requirements and do away with surge pricing.

Seeing the surge price indicator when you open the Uber app is one of the more cringe-worthy moments of our app usage every day, maybe rivalled only by the Google Now notification every morning/evening of heavy traffic on our usual route to work/home. We would all love to not run into traffic or pay surge pricing. Surge pricing, especially in emergency situations, has got Uber heat globally. But, opposition to the concept of surge pricing altogether seems very surprising to me.

Many Uber users I know would prefer that the governments leave the cab companies alone instead of killing one of the rare forms of public transport which is working seamlessly in our cities now. I have not got a NPS mailer from Uber, but expecting drivers to maintain an average of 4.8 is quite a high bar to start with.

I found this interesting quote on the Mixpanel blog from Max Levchin about how he builds trust in his new consumer finance startup Affirm.

“What people really want is to understand that they are being honestly dealt with and that they know what the true cost [of the loan] will be,” Max says. “Telling people that a set of metrics — price, rate, whatever — is never going to change is very, very powerful. As soon as you establish that this data is the baseline, it has an unbelievably comforting effect on people trying to understand data.”

Max Levchin — Mixpanel Signal Blog

Why Uber feels okay even when it wants 2x the usual price is because it applies to everyone at that place at that moment. You do not need to be a master of the art of negotiation to get a better deal than the guy next to you. Uber does not try to charge me more when I land in a new city. Similar to any company which depends on repeat usage, Uber seems to be aligned with the user’s interest by (over?)aggressively pushing UberPool. It may not be earning them the most bucks, but they seem to be ready to do the right thing.

In a deal-obsessed country, it is good to see a product being successful even as it commands a premium over competitors.