Three academics from Northeastern University wrote an article where they tried to reverse engineer Uber’s surge pricing in San Francisco and Manhattan.
They studied Uber’s surge price algorithm and the fairness of the pricing.
Generally they found the pricing was fair, except for some “jitters” or consistency of pricing which they brought up to Uber and Uber addressed.
Most interestingly, the study suggested that that surges did not necessarily lead to more supply of cars. In fact, they found that the number of rides could even go down – drivers stayed away because they knew they would get fewer customers at higher prices.
Christo Wilson, one of the academics, who authored the study commented that it was impacted demand much more beneficially than it did impact supply.
Uber disagreed with the study. The academics created 43 Uber accounts and placed them across both cities. The accounts pinged Uber every 5 seconds and collected the data. Uber’s disagreed and responded that the study’s methodology did not account for cars that were immediately taken up by riders and were replaced by other cars.
Checking out the forums on Uberpeople.net suggests that newbie Uber drivers are most interested in chasing surge. Experienced drivers in the US do not like to chase surge.
- “come to the conclusion that chasing surges in these parts is a losing proposition”
- “surge is not real, it (is) a false representation of truth”
- “more often than not when I’m in a surge pricing area by myself I won’t get a ride”
In conclusion, just because an area is surging does not necessarily mean going to that area as a driver is the best strategy. This is especially true if only a specific area is surging, because too many other drivers would drive there in the hope of getting a fare, and this will result in less numbers of those jobs actually getting fares.