Uber users with low phone batteries more likely to accept surge pricing
Company researcher says Uber won't be acting on the information to set fares
It's no secret that Uber uses surge pricing at peak periods, such as New Year's Eve, when demand is high.
But what many may not know is that when you download the Uber app, the company can track your smartphone battery life — and it's studying how that influences your price point.
The company has determined that customers are more willing to accept surge pricing if they know their phone is about to lose power.
The ride-hailing service is alerted when a customer's phone battery is running low because the app switches into power-saving mode.
In a recent NPR podcast titled This is Your Brain on Uber, Keith Chen, the company's head of economic research, said people with fading batteries are less inclined to wait "10 to 15 minutes" to see if demand for drivers drops, along with pricing, because with a low battery, they may not get a ride at all.
You're willing to pay more
The behavioural economist at UCLA said users are willing to accept surge pricing increases as high as 9.9 times the normal price of a ride if their smartphone's battery is close to dying.
Chen said it's just "an interesting kind of psychological fact of human behaviour." He stressed the company is not going to act on the information to set fares.
Uber says it uses "dynamic pricing" to meet its goal of getting a car to anyone who wants one within minutes in a busy city and provide an incentive for drivers to go where they're most needed. People who have time to wait longer usually pay a cheaper fare.
You'll get used to surge pricing
Chen also said people are getting used to the surge and Uber has seen demand during peak periods drop by a much smaller amount than when it introduced the system.
The Uber app will always ask a potential passenger to confirm the higher fare first before requesting a car.
"In many major cities in the United States, we're up to 60 per cent cheaper than taxi fares when we're not surging. What that means is you can surge 2.1 (times) and still come out even [compared to] if you had just taken a taxi," Chen told NPR.