Is demand for Uber rides elastic or inelastic?

Uber's supply and demand curves are highly elastic; drivers on the supply side are people with alternative funding sources and preferences, meaning they work when they want to (and even sometimes for the competition).



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How are prices determined? Many data points go into calculating an upfront price, including the estimated trip time and distance from origin to destination, as well as demand patterns for that route at that time. It also includes any applicable tolls, taxes, surcharges, and fees (with the exception of wait time fees).

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Consumers' demand curve for Uber rides is, in economists' speak, quite inelastic--that is, not especially responsive to price. Doubling fares reduced demand by around 40%. That's why surge factors can be so large—reportedly up to 10 times on New Year's Eve. It takes a big price changes to prevent shortages.

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Driver requirements details
  • Meet the minimum age to drive in your city. ...
  • Have at least one year of licensed driving experience in the US (3 years if you are under 25 years old)
  • An in-state license is required.
  • Use an eligible 4-door vehicle.


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Startups with excellent on demand business models like Uber, Airbnb, etc. which contribute to the on demand economy, have become famous for the funds they get from the investors to grow their resources.

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