Uber's surge pricing earns it an 'F' on Better Business Bureau test

Some customers claim they were charged the higher amount without notice from Uber

Uber aims to give people an easy way to hail a ride from their smartphones, but its surge pricing is wreaking havoc on at least some customers.

The company currently holds an "F" rating from the Better Business Bureau, a nonprofit organization that tries to settle customer disputes and develop standards around truthful advertising and business practices.

Uber's "F" grade -- the lowest grade possible -- stems from more than 90 customer complaints lodged against it over the past three years, with many criticizing Uber's surge pricing policies. Customers say they were not aware of the surge pricing, and that Uber's customer service was unresponsive in settling their complaints.

Many of them say they were charged one price for a ride, then charged a much higher fare later.

"Uber charged my card US$710 for a nine-mile drive without notifying me of the surge charges that were in place at the time of my ride and will not refund," one customer posted on the BBB site.

Uber's surge pricing typically goes into effect during busy periods of high demand, and the company's app notifies customers when surge pricing is in effect before they request a ride. But some of the customers' complaints allege that Uber charged them multiple hundreds of dollars for surge-priced rides without any notification.

Other customers cite fraudulent charges on their credit card statements by Uber, without even having used Uber's app. "I have been charged three unauthorized transactions from this company whom I have never even heard of in my life," one person said.

The New York Times called attention to the grade on Thursday, but Uber's "F" may have been there for months if not longer, said BBB President and CEO Lori Wilson.

The BBB's business ratings are constantly in flux depending on how and when the particular business responds to the complaints and other information posted to the BBB site. Given the number of complaints left unresolved over the past couple months, it's likely that the "F" has been there for some time, Wilson said.

Uber has argued that surge pricing helps to balance supply and demand during popular events or times when many users may be requesting rides, but when not many drivers may be on the road.

"Uber's direct channel for two-way feedback is regularly reviewed and acted on to ensure a high-quality experience," an Uber spokeswoman said Thursday. "The fact is that consumers in 220 cities around the world have made their opinion known by taking millions of rides with Uber," she said.

Uber is also not the only ride-sharing company to have received an "F" from the BBB. Lyft also has an F, due to its failure to respond to three complaints filed against it, the BBB says.

So too does Cambridge, Massachusetts-based Zipcar, for similar reasons.

In traditional transportation options, San Francisco-based Yellow Cab also has an F for failing to respond to complaints.

An earlier investigation of the BBB by ABC News also showed that the nonprofit had given some businesses higher grades after they paid their annual dues to the BBB.

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com

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Zach Miners

IDG News Service
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