Uber to return extra surge costs for riders during CTA outage; advocates say surge pricing rips off drivers
CHICAGO (CBS) -- When a power outage halted the CTA Red, Brown, and Purple lines during the morning rush Thursday, many passengers turned to rideshare apps to get to work once they got off the stalled trains.
But as CBS 2's Sabrina Franza reported, those passengers were faced with fares they say aren't fair – as surge prices left passengers paying big.
There was some good news Thursday afternoon from Uber, which said it is going to refund riders for the extra surge money they paid.
But for drivers, when prices go up, they are left to wonder where exactly all that extra cash goes.
Surge pricing shot up when the 'L' took its big L Thursday morning and everyone was left looking for a plan B.
One tweet showed a price of $55.90 get downtown from the Belmont Red, Brown, and Purple Line station, while another showed a price of $59.96. CBS Chicago Digital Line Producer Blake Tyson noticed a ride down three miles of DuSable Lake Shore Drive in an UberXL would cost $83.38.
"You passengers are being ripped off, and us drivers are being underpaid," said Lenny Sanchez, co-founder of the Independent Drivers Guild.
Sanchez, a former rideshare driver himself who is now an advocate for drivers, explained how surge pricing works for him and his colleagues.
In one instance, a customer paid $34.94. Of that, the driver got a cut of $18.46 – about 45 percent. The driver's cut included a flat surge fee of $7.24, but the customer does not just pay that flat rate in addition to the normal fare. Rather, the customer is charged a multiplier based on distance -- from which the driver does not benefit.
In other words, drivers actually do make more money when there is a surge -- when drivers are on the road, they see a map showing the flat surge fee they'll receive when they accept a ride. But compared to what the customer pays, the driver's payout does not work out to nearly the percentage they were getting before.
"The driver is literally making $10 less than they would have in the past, on the exact same fare," Sanchez said.
Advocates like Sanchez are pushing for an ordinance, that would standardize surge pricing, so drivers see more of the profits.
"A cap on the surge, because not only are we being underpaid, but as passengers, you guys are being ripped off as well too," Sanchez said.
There is one such ordinance on the table now, but it has yet to be scheduled for a City Council committee hearing since it was introduced in February.
Once again, Uber says they were going to refund customers the difference in price from surge to regular prices.
How they do that, we will soon see.