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Tag: Lauren Kirchner

Uber’s Surge Pricing May not Lead to a Surge In Drivers

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Uber has long stirred controversy and consternation over the higher “surge” prices it charges at peak times. The company has always said the higher prices actually help passengers by encouraging more drivers to get on the road. But computer scientists from Northeastern University have found that higher prices don’t necessarily result in more drivers.

Researchers Le Chen, Alan Mislove and Christo Wilson created 43 new Uber accounts and virtually hailed cars over four weeks from fixed points throughout San Francisco and Manhattan. They found that many drivers actually leave surge areas in anticipation of fewer people ordering rides.

“What happens during a surge is, it just kills demand,” Wilson told ProPublica. “So the drivers actually drive away from the surge.”

When contacted this week, Uber said that their own analysis has shown that surge pricing does, in fact, attract more drivers to surge areas. “Contrary to the findings in this report — which is based on extremely limited, public data — we’ve seen this work in practice day in day out, in cities all around the world,” Uber spokeswoman Molly Spaeth wrote in an email.

The researchers also uncovered a few tips about how to avoid surge prices. They found that changing your location, even by a few hundred feet, can influence the price you get. They also discovered that you can often get back to normal fare levels by waiting as few as five minutes.

“The vast majority of surges are short-lived, which suggests that savvy Uber passengers should ‘wait-out’ surges rather than pay higher prices,” the authors wrote in a new study they are presenting at a conference in Tokyo on Friday.

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