TECH
12/19/2014 12:00 pm ET Updated Dec 20, 2014

Uber Wants To Patent Its Controversial Surge-Pricing Plan

Uber

Uber is trying to patent one of its most controversial features: surge pricing.

The car-service app in September of 2013 applied to patent the way it charges customers during busy periods, Bloomberg reported on Thursday. When there's higher demand for cars, Uber charges more.

Some have called this practice price-gouging, though it is not illegal to charge more for cars when demand is higher.

In the most recent flare-up of controversy over the practice, many critics were upset that Uber started to use surge pricing in the part of Sydney, Australia, being evacuated during a hostage crisis last week. Uber explained in a Twitter post that surge pricing is automated, and it went on to offer free rides during the evacuation.

"The system determines or approximates an amount of available service providers for providing the service at the given time," the patent application reads. "Based on the determined amount of requesters and the determined amount of available service providers, the system adjusts a price, relative to a default price, for using the service provided by one or more service providers."

Uber and its founders have applied for at least 13 patents in the U.S., according to Bloomberg. The U.S. Patent and Trademark Office has initially rejected 10 of those, but is still considering the surge-pricing application, according to Bloomberg. Uber did not immediately respond to The Huffington Post's request for comment and declined Bloomberg's request for comment.

As Quartz notes, the concept of raising prices when demand is higher is not new; it is already practiced by airlines, hotels and car-rental agencies. But Uber may be unique in that it can immediately increase the supply of drivers to meet higher demand, while hotels can't immediately add more rooms and airlines can't immediately add more planes.

CONVERSATIONS