Uber expensive: New Year's price hike angers customers, concerns officials

8:27 PM, Jan 6, 2013   |    comments
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Tom Downey, director of Denver's Department of Excise and Licenses, says passengers who ride Uber may be at risk of paying too much and riding with drivers who are not regulated in the same manner as taxi drivers.

"The bottom line is that we are concerned," Downey said.

Downey says the problem is that Uber is not licensed like a traditional cab company.

"You're putting yourself at personal risk," Downey said.

Uber customers say they choose the service precisely because it's not like a taxi.
Uber sells itself as a classier alternative to a cab ride, a luxury car service you order with your smart phone.

You download the Uber app, a black car or SUV picks you up, and your credit card is automatically charged.

Aric Goodman downloaded the Uber app shortly after it came to Denver this summer.

"It's certainly an upgrade from a traditional cab," Goodman said.

More and more people are choosing Uber for a stylish ride around town.

"A private car service and that it's your private driver. So you can pick whether you want a black car or an SUV for a little bit more," Goodman said.

Goodman says he's used Uber more than two dozen times.

"It's a little bit more expensive but traditionally it's been worth it," Goodman said.

Early New Year's Day, he ordered a ride from downtown to the Denver Tech Center, a ride he estimates he has taken at least 10 times.

"[It] probably costs on average between $47 and $55," Goodman said.

Imagine the sticker shock when he got the bill.

"This time Uber cab charged us $284," Goodman said.

Goodman complained and Uber emailed back explaining he experienced "surge pricing," raising rates to keep cars available for those willing to pay a premium.

The app even had a disclaimer on New Years and Goodman accepted the higher fare.

"Our goal is to be a reliable transportation option and have a ride for you when you need it," explained Uber Denver Community Manager Meggie Brennan in an email to Goodman.

"Thus, our prices change dynamically. If demand outstrips our supply of cars, prices go up, and reduced prices apply when supply frees up again," Brennan said.

Brennan added the app sent out a notice to customers, who had to manually type that they accepted the higher fare.

"I had no clue that it was going to be $284," Goodman said. "I think it's pretty unfair, pretty unethical, and extremely unreasonable."

As of Thursday evening, Uber had not responded to an email request from 9Wants to Know for comment sent Thursday afternoon.

The company's website shows Uber operates in more than 15 US cities, and others around the world.

Controversy follows the company, which has faced legal challenges in San Francisco, Chicago, and New York.

In New York, Uber used "surge pricing" to double fares after Hurricane Sandy.

The Denver Taxi Advisory Council and Colorado Public Utilities Commission are taking a close look at Uber, but so far the company has not faced any legal challenges in Denver.

Taxi companies are regulated by the state and taxi drivers by the city. Uber avoids that regulation by calling itself an app maker that simply arranges rides with "partner drivers."

"We don't know who that driver is. We don't know who that company is," Downey said.

Downey says all the government-mandated protections in place when you ride a cab, just don't exist when you ride Uber, including price control.

Metro Taxi General Manager Kyle Brown says Uber's not playing by the same rules as other Colorado cab companies.

"Uber has come into town. Bypassed all the regulation," Brown said. "There's no protection safety wise for the riding public. There's no protection price-wise."

Uber's website says all their drivers are licensed.

"Just be careful and know what you're getting yourself into," Goodman said.

Goodman says he always a good experience with Uber, until that $284 bill.

"If I can get a cab, I'll certainly take it," Goodman said.

There are other apps out there that let you order a cab without making call.

In Denver:
Taxi Magic (Denver Yellow Cab) - https://taximagic.com
Metro Taxi Denver App for iPhone and Droid -- http://www.metrotaxidenver.com/app/
*Union and Freedom have internet reservation systems, but not mobile apps

Flywheel -- http://flywheelnow.com/
Hailo -- https://www.hailocab.com/nyc/
Get Taxi -- http://www.gettaxi.com/
myTaxi -- http://washington.mytaxi.com/
Hail A Cab -- http://hailacabapp.com/

9NEWS received the following email response from Uber Denver General Manager Will McCollum:

The use of Uber's technology in Denver is completely legal. We partner only with companies and drivers that are fully licensed by the proper authorities. We have provided thousands of rides to customers in Denver and around the world that are high-quality, reliable, and safe.

New Year's Eve was no exception. To ensure that a ride is reliably available during times of high demand, we use "surge pricing" -- raising the price to get more cars on our system and lowering it once the demand is met.

We understand that this can result in fares that are higher than expected. That is why we went to extraordinary lengths to inform our customers. All our customers received an email informing them that New Year's Eve would be an evening where prices could significantly increase. When they opened the app, customers could estimate their fares, all were warned about the use of surge pricing and what the surge multiple was at that time, all had to confirm that they accepted the higher pricing, and in many cases -- such as the one you cite -- customers had to manually type in the surge price multiple itself.

By taking these steps, we were able to provide thousands of safe, reliable, and classy rides to thousands of customers in Denver and around the world with minimal problems or complaints.

In regards to Superstorm Sandy, Uber experienced unprecedented demand especially with limited public transportation available. In order to maximize the number of drivers on the system, we started paying drivers 2x the fare on all trips - and in the meantime only charged riders the standard 1x fare, avoiding surge pricing for most of the day after Sandy. Doubling drivers' fares tripled the number of cars on the road and kept them out there far longer.

(KUSA-TV © 2013 Multimedia Holdings Corporation)

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