Uber has applied for at least 24 patents globally, Bloomberg reported Thursday. Among them was a patent for “dynamically adjusting prices for service” on mobile devices. That sounds a lot like surge pricing. That patent is still pending.
People love Uber because it’s convenient. You tap a couple buttons on your phone and a car comes and picks you up.
If there’s one customer complaint about the company, though, it’s probably surge pricing, when the company drives up fare prices during times of high demand.
Uber’s surge pricing feature is great for the company’s business, since Uber keeps a fixed per cent of fares. When Uber’s surge price multiplier kicks in, Uber makes more money. It’s come under criticism by customers in the past; Uber instituted surge pricing during Hurricane Sandy and customers accused the company of unfairly profiting from the natural disaster. As a result, Uber later said it would restrict surge pricing during emergencies.
But Uber says the goal is to make sure the supply of drivers will catch up with the number of rides being requested.
“By *raising* the price you *increase* the number of cars on the road and maximise the number of safe convenient rides,” Uber explains in a blog post on surge pricing. “Nobody is required to take an Uber, but having a reliable option is what we’re shooting for.”
Soon, Uber’s surge pricing could be Uber’s alone.
Ten of the 13 patents Uber filed with the US Patent and Trademark Office have been denied for being too obvious or other reasons. But Uber continues to push for patents.
If the patents are granted and upheld, Uber could theoretically extract licence fees from competitors who do the same thing, like Lyft (which calls its surge pricing “Prime Time”), or force them to adopt different tactics.
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