A strike of London’s underground workers promoted Uber to triple its fare in London. The surge price of the ride sharing company was raised three times higher than the typical fare of a ride during the strike and it attracts many capital workers.
Drivers who work in Uber are not employees, but they are contractors who can work as they wish. They can work in a flexible basis as little as they want. During demand of peak hours, fares will be increased temporarily to incentivize more drivers who are ready to work on the platform.
Due to this strike of tube workers, many people turn towards the ride sharing industry Uber. There was high demand for Uber rides on the day of tube strike as people were unable to move around the capital.
Already there is scarcity in the Uber cars, so raising the fares will put many people to move away from this service, thereby suppressing demand. Umber’s plan to raise prices with increase in demand was the right decision.
If Uber keeps the fare unchanged, then thousands of Uber users will spend their time on the phone for hailing cars.
Rather than building queues for getting cars, car hailing on a ‘First come, first serve’ basis is better and that is why Uber decided to raise the fares.
Another idea being the fare raising is that the people who urgently require rides will be ready to pay more while others choose other modes of transport, instead of going with a high fare service.