The car transportation service Uber is requiring its riders to pay a minimum of $175 per ride on New Year’s Eve.
Chief Operating Officer Travis Kalanick told Business Insider, “It’s just supply and demand.”
Uber uses a cell phone application to determine your location and have their drivers pick you up. The passenger then automatically pays through the Uber app, which needs a credit or debit card attached. It’s a seamless and efficient transaction which has led to the company being valued at over $40 billion.
While the company has had issues with local transportation laws, users of the ride sharing app have overwhelmingly supported Uber. Minor incidents of harassment and being overcharged have been reported but that was no different when using a traditional taxi cab hailed from the street corner.
Demand for taxis on New Year’s Eve skyrockets in cities like Chicago, New York, and Los Angeles. With severe shortages of available taxis, passengers don’t have much choice.
“By the time you buy a ticket to a party, drinks, maybe some party favors, can you place a price on your safe ride home?” Kalanick said. “It’s still way cheaper than getting a DUI.”
With New Years being the biggest party night of the year, Uber is doing what it thinks is best for its business. The fact is, there are not enough people who drive cab for a living to allow for every party going person a ride to and from their destination. And with drunk driving checkpoints set across the country, the demand for sober drivers is high.
“We still won’t meet our demand,” said Kalanick. “We could probably charge a hundred and fifty bucks but we don’t want to look like dicks.”
Can You Give Me A Lyft?
Consumers have other options for transportation as well. The ridesharing market has expanded in recent years with Lyft and Sidecar being Ubers main competitors. They will also increase their fare. And there is always a traditional taxi cab company you can call.
However, some companies may lower their fare in an attempt to increase market share or band recognition. Economist Walter Adams told The Wall Street Journal, “Uber can maximize its profits without worry. They are like the Apple of ride-sharing companies. More people already have their app linked to their card and information so it’s easy.
“A billion dollars will be spent on taxi cabs tomorrow and Uber is set to rake in a fortune.”
Uber CEO Kalanick said of his competition, “It’s supply and demand. If a competitor is only charging ten bucks for a ride, good luck getting a driver at 2 a.m. when the bars close. We will have the most drivers with the most experience. Simply put, you’re gonna pay to get home. There’s a reason we keep having multibillion-dollar fundraising rounds.”