Uber and Lyft take a commission, but most of the money goes to the driver. Surge pricing happens when there is high demand and supply can not keep up, or suppl

Uber and Lyft take a commission, but most of the money goes to the driver. Surge pricing happens when there is high demand and supply can not keep up, or supply (drivers) choose not accept offers based on price and whatever other factors that driver chooses when they make a decision on who to give rides to and how far to drive. I am not sure Uber and Lyft work like you think they work. Drivers can take anyone they want. They often take the most profitable offers, because they want to make the time they spend in their car more worthwhile. The drivers can offer rides all day long and accept any proposal offered, if they choose to do that. Drivers can also hold out within a metro, collectively, and drive the price up by artificially shortening supply. People need rides, so they will offer to pay more in order to entice a driver to pick them up. And, if prices get too high, taxis are usually an option where artificial supply limitation is happening. VC money goes to kick-starting infrastructure and software and employees that run the business.