As we head into the busy Christmas and new year season, many Australians will find themselves calling on Uber while price surging is in effect — a price multiplier that kicks in during high-demand periods to get more drivers onto the roads.
But a local rival has accused the ride-sharing company of pre-planning price surges, against Uber’s public stance that it is only applied at the time and place of demand.
Australian ride-sharing app GoCatch has claimed that Uber’s latest correspondence to its drivers “virtually guarantee” that surge pricing is applied, based on calculations of earnings promises.
Uber’s message promises drivers “at least $45-50 per hour” on weekends — a rate that, according to GoCatch, cannot be met without pre-planned surge pricing.
“In order for every driver to earn $45 per hour, the average trip would have to cost at least $30. But the average rideshare fare on GoCatch, which never surges, is just under $20.
“Given that GoCatch is about 5% cheaper than our competitor’s base fare, their passengers can expect a fare multiplier between 1.60x and 1.75x to make good on that promise,” GoCatch chief executive David Holmes said, adding that multipliers in that range makes Uber more expensive than taxis.
In response, an Uber Australia spokesperson told Business Insider that “more than 800,000 Sydneysiders choose to ride with Uber because they know it’s a safe and reliable way to get around”.
“In preparing for one of the busiest weekends of the year, we’re happy to invest in the reliability of our service so riders can enjoy the convenience of getting a ride within minutes,” the spokesperson said.
While GoCatch says it does not have surge pricing, the company does have different rates for peak and off-peak periods. Peak is defined as 7am to 10am on weekdays plus 10pm to 2am on Fridays, Saturdays and nights before public holidays, with the per-kilometre rate up to 58% higher during that time. The company says this is still 10% to 15% cheaper than taxis.
GoCatch’s rideshare service launched in February, to challenge Uber’s dominance with lower price for passengers and a higher cut for drivers. The Australian startup takes 15% of the fare from drivers as opposed to UberX’s 20% and cut its fares by a further 5% in May.
Reports even surfaced in May that Uber was firing drivers for also using GoCatch, even though officially the company denies they are employees and have no exclusivity clause.
GoCatch stated at the time that it has no problem with drivers subscribing to both apps.
Business Insider Emails & Alerts
Site highlights each day to your inbox.