When the end of the night rolls around and you have to order your Uber, things can sometimes become touch and go with your battery. Uber has learned from its internal data that we are much more likely to pay for surge-priced fares when we aren't sure how much longer our batteries are going to last.
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There have been other quirks found as well, and they were revealed by Uber's head of economic research, Keith Chen, during a recent episode of NPR's Hidden Brain podcast.
The reasoning is that because anyone who has a fully charged phone can wait and see if there will be lower costs when there is less demand. Since many bars and clubs close at the same time, the demand for rides can cause prices to surge.
However, if your phone is almost dead, you aren't willing to take the risk.
Uber knows when your phone battery is starting to die because the app collects that information so that it can switch into power-saving mode. Still, Chen swears that Uber will never use that knowledge to get more money out of your for your safe ride home.
"We absolutely don’t use that to kind of like push you a higher surge price, but it’s an interesting kind of psychological fact of human behavior," Chen said.
According to Mashable, Uber's surge pricing uses a proprietary algorithm that takes into consideration how many users are hailing rides in a specific area at a given time. Customers don't always seem to believe that it is all robotic considering the multiplier is almost always a round number like 2.0 or 3.0 - which seems like it was made up by humans.
"They must have seen it was raining and just decided to mess with me, right?" Chen says of the reactions. "Whereas if you say their trip is going to be 2.1 times more than it normally is, they say, 'Wow, there must be some smart algorithm in the background here.' It doesn't seem as unfair."
At the same time, most Uber customers hate surge pricing as rates can go up to 9.9 times the company's normal pricing.
"This basic question of how psychologically painful the experience of paying a price is is something I worry about every day," Chen said.
Another problem is that the company also surges prices when there is an emergency - like in 2014 when their prices went up for those trying to flee the Sydney hostage crisis.
Still, the company just keeps growing and shows no real signs of stopping.
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"It's one of the reasons we've been able to displace taxis so quickly," Chen said. "The only way to get everyone who lives in a dense part of a city a car within five minutes was to do that through dynamic pricing."