If there's one advantage traditional taxis have over Uber, it's that their rates always remain the same. That's not true for Uber. When the ratio of passengers requesting rides to the number of available drivers in an area becomes untenable, the "ride-sharing" app jacks up rates and informs riders they'll have to pay surge prices.
Miami Beach is, of course, one of the hottest New Year's Eve destinations in the world, so it shouldn't be a surprise that the area would be affected by surge pricing on
CNN media correspondent Brian Stetler was in Miami Beach for the holiday and found that when he tried to find a ride, the surge pricing hit 9.9 times the regular rate.
Other users were met with equally crazy surge price rates.
Uber's surge pricing is one of the most controversial aspects of its business model. Though, the service has long defended the practice.
"We found that, without surge pricing, Uber is not really Uber — you can’t push a button and get a ride in minutes," the company said in a news release in September.
The company says that people who don't want to pay surge pricing often end up waiting until fares decrease. Meanwhile, drivers from other nearby areas with less demand flock to the area affected by surge pricing in order to make more money. That's how it works in theory anyway.
"Surge pricing has two effects: People who can wait for a ride often decide to wait until the price falls, and drivers who
That may work in everyday situations, but the system isn't quite built for a night like New Year's Eve in Miami.
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However, the 9.9 surge price isn't the highest ever recorded. In 2013, surge prices briefly hit 50 times the regular rate, though no one ended up accepting rides at that price.
Uber is technically illegal in Miami-Dade County but has remained operational while Mayor Carlos Gimenez tries to hammer out legislation that would legalize services such as Uber and its competitor Lyft.