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Travel Tip: Watch out for Uber Surge Pricing

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UberWe’ve talked about ride-sharing programs, where you use an app to get a ride from a person who’s willing to give it. But is it a good deal?

One of those services is called Uber.  You see which drivers are nearby through a smartphone app, and the rate is calculated based on time and distance. However, history has shown that when demand of these vehicles outpaces supply—like during a holiday or a big storm—prices can surge. Over New Year’s Eve, Uber surge pricing resulted in $400 fares for rides of just a few miles. At the start of 2014, Uber slashed fares for its Uber-X service by up to 20 percent. The good news is that the apps have transparency about pricing, so you have to agree to surge charged.

Another service, called Lyft, is peer-to-peer. As in, regular drivers in their own cars. Now technically, they don’t charge anything. Your payment is considered a donation. But don’t cheap out because not only can you rate drivers, but they can rate you! A poor rating could mean you won’t get a ride again.

Sidecar is the other major player in this arena.  Like Lyft, your payment is a considered a donation and the app suggests the appropriate amount. And with both services, if you cancel, you may be charged a $5 fee.

So are they worth it? For now, yes. But remember this is a new industry, and the rules are constantly changing.

Visit our car rental archives for more traditional and alternative options.

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