Uber's dynamic pricing system will be in place on New Year's Eve

It's New Year's Eve, and the responsible thing would be to not drink at all or to get a designated driver, but for many people, the next best option is to make use of a ride-hailing service.

But as we've seen in previous years demand can exceed supply and tariffs soar, and sometimes there is also a shortage of lifts available.

Alon Lits, General Manager, Sub-Saharan Africa at Uber explains pricing decisions to avoid anyone being shocked.

The key thing about surge pricing is that if it is in effect it will be very clear in the application...there are no surprises.

Alon Lits, Uber general manager Sub-Saharan africa

It will clearly show the additional multiple being added to the fare.

He explains that surge pricing works off an algorithm based on a supply and demand dynamic.

It comes into effect because we would rather give people to ride at a higher price than leave them stranded.

Alon Lits, Uber general manager Sub-Saharan africa

Another important aspect of surge pricing is it also encourages other drivers to get out on the road...they are independent contractors and could choose to be with their families and friends.

Alon Lits, Uber general manager Sub-Saharan africa

He says price surging will not be in effect all night and encourages customers to try the app later when they have subsided.

Listen to the interview below:


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