Tech startups be warned - herein lies the cautionary tale of Uber, a service and mobile app that gets you a cab and lets you pay for it with your phone. Uber uses a sliding pay scale depending on how high demand is for the service. If it's busy, you pay more; slow and you pay less. Sounds fair, but on New Year's Eve, some Uber customers felt the dynamic pricing was tantamount to fraud as the prices skyrocketed due to surging demand, the New York Times Bits blog reported. As the report points out, this type of demand based pricing is not a new idea, and it includes an anecdote about a Coca-Cola executive who considered raising prices on soda machines when the temperature went up. That didn't go over so well, but Uber said the pricing will stay as is for New Year's Eve, at least.

Uber works on iOS and Android, is iPhone, Touch and iPad compatible (Android 1.5 or higher) and free. Just set a location, send in a ride request and pay with the card you have on file. You can rate your driver, save locations and the app will tell you how far away the cab is if it's been dispatched. There is no confirmation feature, so once you send a car request, there is a $10 charge if you cancel (or if you are just trying it out and mess-up).

Taxi Magic also works on iOS and Android (same compatibility as above for both), but you don't have to pay for your ride through the app. You can pay cash or however you want, but there is an option to pay using the app. Taxi Magic will even send you an e-receipt, and that costs an extra $1.50. Some users have reported issues with dispatchers not getting their requests or the service not working in their city, however.

On the other hand, Uber is meant to be a sedan service, so the prices are higher. It might be worth it if you need a ride, just consider that dynamic pricing if you use them on New Years. Tell us in the comments if you've used these apps and which one you like and why.