Uber's infamous surge pricing has left even its own CEO astounded, as a recent exorbitant fare charged to a journalist shocked . During a recent interview with Wired editor-at-large Steven Levy, Khosrowshahi was shown a receipt for a 4-km trip across Manhattan, New York, which amounted to a staggering $51.69 (nearly Rs 4,300), including the driver's tip.
"Oh my God. Wow," exclaimed Khosrowshahi upon seeing the fare, taken aback by the cost. The CEO had ventured a guess of "twenty bucks" for the trip's cost and was stunned to learn that the fare was over twice as much.
The journalist informed the CEO that just five minutes earlier, the price had been $20 higher due to surge pricing. When questioned about this pricing strategy, Khosrowshahi attributed it to inflation and increased costs of time and labour.
“Everything is more expensive,” he said bluntly to the journalist.
However, a report by Forbes contradicts this explanation, revealing that Uber's prices in the US have increased at four times the rate of inflation from 2018 to 2022, with fares rising a total of 83% over nearly four years.
Previously, Khosrowshahi had claimed soaring prices to a shortage of drivers during the coronavirus pandemic, despite the ride-hailing app reaching a record 5 million drivers in August 2022.
In India, even without rain or festivals, a short 5-km ride can go up to Rs 300, thanks to surge pricing, in metro cities.
Despite the surge pricing controversy, Uber recently announced a record-breaking second-quarter performance, reporting a profit of $394 million in the three-month period ending June 30.
This marks a substantial improvement from the $2.6 billion loss reported in the same period the previous year. Operating profits for the quarter reached $326 million, marking the company's first profitable quarter since its inception in 2009.
However, the surge in prices has not been without consequences. Uber's stock fell nearly 6% following the earnings report, indicating that investors are wary of the potential impact of surge pricing on the company's long-term prospects.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
