Uber's own CEO stunned by huge fare charged for 3-mile ride due to surge pricing
Uber's own CEO was left shocked at the price of a three-mile Uber ride in a city centre - especially on a quiet morning with little traffic.
A journalist had asked Dara Khosrowshahi, the leader of the global giant ride-share app, to estimate the cost of his morning ride that spanned three miles through the Upper East Side of New York City - a relatively easy trip when there are few cars mid-morning.
The CEO guessed that a ride like that would be about $20. The journalist laughed and showed him the bill. The three-mile ride was a whopping $51.69 - including tip.
“Oh my God. Wow,” Khosrowshahi exclaimed. Khosrowshahi was surprised, but then quickly gathered himself and replied that "everything's getting more expensive."
In the interview with Wired.com, the CEO added: "Everything is more expensive. Inflation has become a part of our everyday life. With Uber, the vast majority of your fare is going to your driver. Earnings per week for our drivers are up 40, 50 percent over the past four years, because that is the cost of time and the cost of labor. I think that’s positive.
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"And we’re seeing audience growth—130 million people come to our platform on a monthly basis. So while prices are higher, people are finding our services more compelling. It certainly hasn’t hurt the business."
Uber's financial reports suggest that the company has finally figured out how to turn a profit (AFP via Getty Images)According to some reports, Uber fares have increased at least four times faster than the rate of inflation.
The journalist informed the CEO that just five minutes later, prices were even higher, with surge pricing tacking on another $20 on top of the immense amount it already cose.
“A surge makes no sense,” the journalist told Khosrowshahi. “It’s 10am on a sunny weekday, and it’s not like the president’s in town.”
Uber's administrators have previously blamed price hikes on a driver shortage, but the driver shortage was caused by low wages, jobs dropping off during the pandemic, and certain ethical and safety regulations that Khosrowshahi promised he'd work on changing.
It does seem to be having an effect, as the company finally turned a profit this past quarter. Uber recorded a profit of $394 million in the three-month period ending June 30, up from the $2.6 billion loss it posted this time last year.
Even so, Uber's CEO had a strange way of looking at their success. In the same interview, Khosrowshahi told editor Steven Levy that, "once we get profitable, I’m going to come up with some other reason why we suck. Because that gets the team psyched up. We have an underdog mentality I never want to lose."
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