31/12/2016 11:08 AM AEDT | Updated 31/12/2016 11:37 AM AEDT

Uber Warns Of New Year's Eve Price Surges

Midnight to 3am will likely see Uber prices rise sharply.

It could cost a lot more than usual to get an Uber home after NYE due to price surges.
Lucy Nicholson / Reuters
It could cost a lot more than usual to get an Uber home after NYE due to price surges.

Uber has cautioned that price hikes could be in store for New Year's Eve revellers, with the ride-sharing company warning that its surge pricing mechanism will take effect in the early hours of 2017.

As thousands of people descend on the Australia's capital cities to ring in the New Year, Uber confirmed that the controversial pricing structure would likely come into play as demand spiked for rides home after midnight.

"During times of peak demand -- on New Year's Eve that's around between midnight and 3am, fares increase via an algorithm to help ensure a driver is always nearby and you can get a ride if you need one," Uber spokeswoman Katie Curran told Fairfax Media.

Last NYE, Uber was attacked for its surge pricing with reports of some customers paying more than eight times the usual fare in the early hours of January 1.

At the time, consumer group Choice urged Uber users needed to be aware of surge pricing and the conditions of using ride sharing apps.

On its website, Uber recommended customers "split the fare" to keep costs down.

"Start the party early by sharing an Uber with your friends, and you can even split the fare in the app. Or, if it's available in your city, select uberPOOL to share the cost with other riders heading your way -- it can be a fraction of the price as uberX," the company said.

It also urged passengers to confirm drivers, share trip details with friends and family, and not to drink and drive.

"Make sure you get into the right car with the right driver. Double check the car's model and licence plate in the app before you hop in your ride, and confirm it's your driver by asking for their name and looking at their picture," Uber's Curran told Fairfax.