Uber Surge is a pricing mechanism that multiplies base ride fares to tackle the high ride demand and low driver supply disparity during high-demand times.
About Uber Surge
Introduced in 2014, Uber’s Surge pricing model follows the concept of supply and demand. There is a limited number of Uber rides on the road at any given time. During cases of high demand such as rush hours or special events, the company hikes standard ride fares. The multipliers are included in the ride fares in real-time. It is also dependent on the location of the customer and not the driver.
Moreover, only base fares, and time and distance components of the ride cost are subject to surge multipliers. Surge pricing is not applicable on cancellation fees, per-trip surcharges, and tolls.
What is the benefit of Uber Surge pricing?
The resultant surge during instances of high demand for rides is done to handle the load efficiently and profitably for both the parties involved.
- The rider gets access to quick and reliable ride-share services even during instances of high demand
- The driver-partner gets to earn more from higher fares per trip and greater trip requests
Uber claims that this surge enables the platform to ‘make sure those who need a ride can get one’.
How does surge pricing work?
Uber leverages an algorithm to calculate a suitable fare multiplier to tackle the surge in trip requests in a particular location. The extent of ride requests at the same time and the number of available drivers on the road are factored in to settle on a multiplier. Once a multiplier is fixed, the trip cost will increase by that amount.
Suppose the local base fare for an UberXL ride is $10, for instance. If the multiplier turns out to be 3x, the trip fare will jump to $30. Note that as real-time demand governs surge pricing, the current multiplier may change within a few minutes to accommodate the local change in demand.
Drivers from non-busy areas rush towards the busy areas with fewer driver-partners. The surge radius soon receives enough drivers to handle the amplified demand load.
Will I be able to avoid surge pricing if I wait for some time?
The surge may last anywhere between a few minutes to an hour or longer.
The timeframe of surge pricing depends on multiple factors. These may be the cause of the surge and the volume of driver-partners available immediately outside the surge radius. Depending on these factors, the surge will last until Uber is able to strike a balance between the demand and supply of rides.
How would I know if the surge is active and what multiplier is being charged?
For riders, there is no specific way to tell if surge pricing multipliers are being charged on their ride. However, if you are aware of the standard trip fares in your locality, you can tell if the surge is active or not.
For the driver-partners, on the other hand, Uber has a surge pricing map on its application. As and when it gets activated, it is displayed as red areas on the map. Also, upon receiving a trip request from a surging location, the current surge multiplier is mentioned on the pickup request screen.