Don’t go down slippery slope of taxi surge pricing, Transport News & Top Stories – The Straits Times

It has long been illegal for taxi operators to allocate rides through bidding – a covert system where commuters who are willing to pay more get assigned a cab. Yet this ad hoc auction, where some touts would guarantee a cab on a rainy Friday evening for a few dollars more, is what surge pricing really amounts to.

But in the case of surge pricing, the “few dollars more” can amount to three or four times the normal fare. It is not uncommon to hear of a 10km ride costing $40-$50.

And during a major rail breakdown – such as the one which crippled the North-South and East-West lines in July 2015 – irate Uber customers complained of fares exceeding $100. Having to fork out five times the normal taxi fare – or in the case of displaced train commuters, 80 times their usual MRT fare – is not something anyone relishes.

On a day-to-day basis, the undesirability of surge pricing may not be obvious now because consumers currently have a choice. They still have access to taxis with fixed and transparent fares. But this situation may not continue for long. The writing is already on the wall.

ComfortDelGro – which recently ran a huge ad campaign with the tagline “No Surge Pricing” – is now offering dynamic fares through UberFlash.

What happens when cabbies discover that it is more profitable to go on the surge pricing booking platform? Clearly, they will game the system to maximise their chances of getting the highest fares in the shortest time. Commuters will remember the “hide-and-seek” tactics cabbies used during evening peak and just before the midnight hour.

The possibility of significantly higher fares aside, there is another negative element to surge pricing – opaqueness. How will commuters know when surge pricing is justified at any given point in time?

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Don’t go down slippery slope of taxi surge pricing, Transport News & Top Stories – The Straits Times.