I personally witnessed Uber hand over their business to Lyft with their surge pricing strategy. They were priced $77 higher than Lyft for the same distance!

Last Saturday night we met a group of friends for a birthday celebration at their local tavern. We had a great time, a few drinks, and closed down the bar.

As the night was winding down, my friends did the responsible thing and began the process of requesting an Uber. They were already irritated that their 15-minute Uber ride to the Tavern had seemed extremely high, at $58, but the way home was quoted even higher at $77

Now this is the first time I’d heard of Uber’s “surge pricing,” which means you pay more at busier times. So when many people are doing the responsible thing at the end of the night, you are going to pay significantly more than you would at times when the drivers are less busy. Their business strategy seems to be to make the person who REALLY wants a ride pay more than the person who can wait or go elsewhere (according to their own site – Read it here!).

I don’t know when businesses are going to finally understand that they are operating in an era of total transparency when it comes to pricing. I mean seriously people, you can stand in a store and quote prices on the Internet!

Businesses really need to understand that prices that feel exploitative will have a short-term financial gain, but long-term consequences to their bottom line and their brand quality. I predict Uber will learn this lesson very soon.

Here is what I wish businesses who implement these strategies would understand:

Stupid business decisions will haunt you eventually, especially if it seems shady to the consumer.

I’m talking about the business decisions that make no sense. The beauty of Uber was that they were less expensive than cabs and you didn’t have to tip. When you remove those differentiators (now they have tipping), there is no reason to use Uber, in my opinion. Especially now that some cab companies have added apps to pay and track the cab.

My friends sitting there with the absurd price quote from Uber had 12 people with them who have cell phones and have used other options telling them “$77 is insane!!!”

As we finished up our conversations, our friends were considering whether or not they should call a good old fashioned cab or take a minute to set up Lyft.
Let me know in the comments what you would’ve done. Good old fashioned cab or set up Lyft?

They set up Lyft. It was uber easy (pun intended).

It cost $22 to get home. That’s $55 less that Uber quoted!

It’s also $36 less than the $58 Uber charged to bring them there.

In my friend’s words “I am a convert to Lyft.”

If the price had been $5 more than Lyft, Uber probably would’ve kept our friends’ business because of the convenience (the app already on their phone), and brand loyalty (Uber is a “known” for them).

But for $55 I’m pretty sure everyone reading this would take a minute to set up Lyft!

Uberx I guess is going to stand for “xtra expensive!” (I could keep going with these uber jokes but I won’t, lol).

I’ll say it again – Stupid business decisions will haunt you.

Not only did our friend make a change to Lyft, I haven’t felt like setting up a new account with Lyft until I witnessed this. So in addition to them discovering Lyft was more affordable (and just as good an experience), so did 12 of their friends, who will in turn tell all of their friends.

I mean a $55 difference in price, with no differentiator in quality, is not going to fly!

On a socially conscious level this bothered me about the Uber surge pricing because my bigger thought was seeing a price like $77 could lead to an intoxicated person to make the choice to drive home if they aren’t in a financial position to pay it. Basically, to take an Uber they would either need to pay A LOT, wait to see if prices drop as the night goes on, walk, or drive themselves. Let’s hope they just request a Lyft!

I’d love to hear your thoughts on Uber’s surge pricing and how you think it will affect their business in the long-term? Have you been a victim of Uber’s price gouging surging? I’d love to hear about it in the comments.

XOXO,

P.S. I’m not an affiliate for Lyft. Just a shocked consumer who wanted to share this story!