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The purpose of surge pricing is to increase profits, the excuse is efficiency.
by darpa_escapee 10y ago
The purpose of surge pricing is to increase profits, the excuse is efficiency.
- oh_sigh 10y agoNo, the purpose of surge pricing is to get more drivers out on the road. That, in turn, is to increase profits, but I'm fairly certain you could argue that pretty much anything any company does is to "increase profits"
- PhasmaFelis 10y agoHuh? Even by the charitable interpretation, the purpose of surge pricing is to reduce the number of drivers being requested (so that the drivers who are actually available aren't overwhelmed).
- whack 10y agoAn increase in price both reduces the quantity demanded, and increases the quantity supplied. I've personally met Uber drivers who plan their work schedules around the times when surge is highest.
- seanlinehan 10y agoThe purpose is to make supply closer match demand. If fares increase, more drivers will be willing to drive. If fares increase, less consumers will request rides. You're correct in assuming that increased prices will reduce the number of drivers demanded. But you're wrong in assuming that the pool of available drivers remains static when prices increase.
- deleted 10y ago[deleted]
- hueving 10y agoI think you are missing the part where drivers get paid more during surge pricing. An increased reward entices more drivers to come out during that time.
- Scoundreller 10y agoOr motivation for drivers to deadhead to a surge area, or take a couple extra rides before taking a break/signing off the for the night.
- nerfhammer 10y agoUber can try to optimize prices to: maximize revenue, maximize profit, or maximize volume of rides. And there's no reason to expect that only the latter Uber has in mind.