How do you think people would react to grocery stores saying "oh, the checkout lines are long right now, everyone gets hit with an extra 20%!" The underlying mechanics are different, but that's kinda the customer experience it gives off.
Without surge pricing, the Uber/Lyft model doesn't really work. It's mainly needed to bring out enough drivers to drive all riders. Without it, people can easily have to wait hours, and the service becomes useless.
I agree that the customer experience feels arbitrary and predatory. In part because people don't have any intuitive sense for dynamic pricing. And in part because we don't trust Uber/Lyft.
If/when they figure out a way to communicate or implement this better could be a game changer.
Their experiments in not even mentioning it's in surge seem like an improvement themselves—I don't want to know that I could be paying a lot less—some higher level of predictability to make it feel like a mature market/commodity could close the gap even more.
A better analogy would be cellphone roaming, if when you placed the call, you were told exactly how much more you were going to pay per minute. Roaming is (and long distance charges used to be) even worse than Uber's surge pricing because you only see the charge afterwards.
Every time i roam from one country to the next I get a text message telling me exactly how much I will be charged for calls, texts and internet.