SAN FRANCISCO (CBS SF) — Uber is disputing a report that the ride-hailing service intends to do away with its much-maligned surge pricing.

NPR reported Tuesday morning that Uber was ending surge pricing which increases fare prices when passenger demand greatly exceeds driver availability

The report quoted Uber engineering lead Jeff Schneider as saying the company was seeking to replace the current surge pricing with an algorithm that would anticipate increased rider demand in an area, and provide more drivers to cover the demand.

Schneider, the head of Uber’s Advanced Technologies Center, also told NPR the company considers surge pricing a market failure.

However, an Uber spokesman told MarketWatch, “Uber is always looking for ways to better predict supply and demand in a city. But this story is not accurate: we have no plans to end dynamic pricing. While we understand that no-one likes to pay more for the same trip, it’s the only way to ensure that passengers can always get a ride when they need one.”

While surge pricing of up to four times a normal fare has been widely criticized by riders and consumer groups, driver often count on the higher fares to balance out other periods of low demand.

Last month, a California Senate panel blocked a bill that would have prevented Uber, Lyft and other ride-hailing services from adjusting their prices based on demand.

 

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