February 10th, 2014
Uber is now well established in London and with their unique surge pricing business model it created is set to disrupt the traditional private hire operator business model in London significantly.
Last week there was a tube strike in London which caused Uber’s demand led pricing to hit a multiple of over 3 times the normal Uber fare for much of the week and we saw widespread condemnation on Twitter with me, in a majority of one, oddly defending their business model.
It seems the majority of users really don’t understand why fares should change at all based on demand. So here’s my take on the situation. Uber is a market maker which connects self employed London private hire drivers to fares, more like a travel agent than an airline.