Transportation Network Company (TNC) Uber has received an “F” rating from the Better Business Bureau (BBB), the lowest possible rating given by the organization. The failing rating largely was attributed to dozens of complaints related to the company’s practice of implementing “surge pricing” during times of high user demand.
Uber received more than 90 complained filed with the BBB over the past three years, most of which focused on surge pricing. Customers claimed they felt misinformed about how they are charged for rides, and say they are unable to receive proper customer service when they try to complain about their fares.
According to the San Francisco Business Times, the Taxicab, Limousine & Paratransit Association sent emails to reporters highlighting that the BBB in this region has received more than 90 complaints about Uber, which it started tracking in late 2012. But what was also interesting wast that the city's Yellow Cab Cooperative also got an "F," with five complaints in the last three years.
During surge pricing periods, Uber temporarily increases fare prices from one and a half to 10 times the normal cost of taking a ride, which is based on the demand for drivers. For instance, when many people in a certain area request Uber at the same time, the price of rides in that area goes up. Uber has defended its surge pricing practice, claiming that it is the company’s way of keeping enough drivers on the road when demand for the service surpasses the supply.
Lyft — Uber’s main TNC competitor — was also given an “F” by the BBB, although the company has received only five complaints in the last three years.
It is important to note that the BBB is not a government agency, and lacks regulatory or enforcement power — it was founded primarily to protect against abuse of advertising by companies and to alert the public about potential fraud.
Despite these complaints, Uber is renowned for leveraging its hefty war chest for marketing gimmicks such as delivering Christmas trees and even kittens to users.
Besides Uber and Lyft, other TNCs are beginning to sprout up all over the world. Earlier this year, french long-distance ride-sharing service BlaBlaCar raised $100 million in venture capital — the largest VC funding ever for a French startup — to expand its service and network globally. The funding was led by Index Ventures, with contributions from existing investors Accel Partners, ISAI and Lead Edge Capital.