Uber and Lyft charge different prices for the same routes booked at roughly the same time, says a leading consumer group.
An investigation by Consumer Reports found that fares on the same route varied by as much as 163% in price in a way that goes beyond dynamic pricing, which is when fares fluctuate based on supply, demand and other market conditions.
Consumer Reports tested 30 routes across 17 states by having volunteers input start and end points to check prices without actually ordering a ride. All 30 routes entered into the ride-hailing apps yielded at least two different price clusters, the study found.
The median difference between the highest and lowest price clusters for the tested routes was 50%. One route in California varied in price by 55%.
“Experts who reviewed our findings said that, while they expected to see evidence of dynamic pricing, they didn’t expect to see such large price differences,” the report said. “Algorithmic and AI-driven pricing tactics like those used by Uber and Lyft are attracting growing attention and criticism.”
Both ride-hail companies strongly disputed the report’s key findings and its methodology.
Uber said the investigation was fundamentally flawed and did not take into key variables such as the distance a driver has to travel to pick up the customer.
The company said it does not engage in surveillance pricing, nor does it personalize fares for individual customers.
“Consumer Reports treats trips with the same pickup and drop-off points as identical. They are not,” said Uber spokesperson Ryan Thornton. “In a real-time marketplace, a trip is defined not only by where it starts and ends, but also by when it is requested and what marketplace conditions exist at that exact moment,” including rider demand, driver availability, traffic, routing and estimated trip length, he said.
Lyft said prices cited in the Consumer Reports study would be inflated by the number of volunteers testing the routes at the same time, creating artificial demand.
Uber and Consumer Reports also clashed over the investigation’s claim that 11% of discounts shown on the Uber app are based on inflated original prices, and therefore are not genuine discounts.
In the investigation, one volunteer received a fare of $94.96 for an UberX ride between two towns near Florida’s Gulf Coast. Another volunteer requested the same route within the same minute and received a fare of $65.95.
More tests were conducted in New York City, where a 30-minute, eight-mile Uber ride from Chinatown to Queens varied in cost from less than $40 to nearly $49. Three volunteers were shown prices for that route below $40, while 17 other volunteers were shown prices around $47.
An 18-mile Lyft trip across Kansas City requested at roughly the same time on the same day triggered fares of $31, $50, $55 and $65, Consumer Reports said in its study.
“The magnitude of the high/low price differentials is astonishing,” said the report’s Len Sherman, an executive-in-residence at Columbia Business School who has written extensively on the economics of the ride-hail industry.
