Who benefits from surge pricing Uber?

Surge pricing automatically goes into effect when there are more riders in a given area than available drivers. This encourages more drivers to serve the busy area over time and shifts rider demand, to maintain reliability and restore balance.



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Surge pricing has no effect on the commission that Uber charges drivers for each ride. However, the added price goes directly to the drivers, which makes it a great opportunity to top-up your income as a driver.

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If the government limits surge pricing, then it is implicitly favoring Uber's consumers over its drivers. Whether limiting surge prices is fair involves a lot of judgment. It seems to be fair in an emergency, but may be unfair at other times, say during rush hour. Furthermore, it also depends on if you benefit.

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Surge pricing occurs when the supply and demand for Uber vehicles becomes unbalanced, for example, due to inclement weather, a public holiday such as New Years Eve or some other event (public transport failure, terrorist attack, …). Supply is low (who wants to drive in a snow storm?).

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Ride-hailing platforms like Uber and Lyft have become the most salient adopters of dynamic pricing—or surge pricing, as Uber calls it. To ensure that the market runs smoothly, these platforms adjust prices in response to demand and supply in real time.

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Nine ways to avoid surge pricing on Lyft and Uber
  1. If you know you're going to need a ride during peak hours, schedule a Lyft in advance. ...
  2. Check the other app. ...
  3. Take another kind of car. ...
  4. Try carpooling. ...
  5. Walk a few blocks. ...
  6. Try out surge tracking apps like SurgeProtector. ...
  7. Wait.
  8. Refer a friend and get a free ride.


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Dynamic pricing takes effect when a lot of people in the same area are requesting rides at the same time. This means that rides will be more expensive. Adjusting the price attracts more drivers to an area so everyone can get a ride.

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Rush hour is typically between 7 – 10 AM and anywhere from 2 – 8 PM. These are the times people are going and coming back from work, adding a strain on traffic and car availability, therefore leading to a price increase.

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Demand for rides increases There are times when so many people are requesting rides that there aren't enough cars on the road to help take them all. Bad weather, rush hour, and special events, for instance, may cause unusually large numbers of people to want to request a ride with Uber all at the same time.

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According to Kalanick, yes. But there is no way for customers to gauge supply and demand for themselves beyond looking at the dynamic-pricing multiple. And dynamic pricing is still not the same thing as true market pricing — like an auction system in which riders and drivers bid for one another's services.

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The bottom line: Uber's surge-pricing algorithm, which is based on supply of drivers versus demand of rides needed, resets about every five minutes, and changes based on zones that are often close together.

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