Why Surge Pricing is the Icing On The Cake for Drivers

 

Uber V day nycThe hours leading up to Valentine’s Day, UberNYC had been texting drivers to notify them that a high demand for rides was to be expected all weekend. Initially, I didn’t think I was going to go out and drive because a) it was totally 6 degrees on Sunday morning and I thought the roads may be icy, and b) I was in the mood to spend the entire day with my sweetheart, I mean… it was Valentine’s Day! But, passing up a FULL DAY of Surge Pricing, like I did during New Year’s Eve, would have been pretty foolish considering whatever I made would hit my bank account a few short days later (Uber drivers get paid once a week). Most people, when they get into my car and ask about the fare hike, think that the drivers don’t benefit from surge pricing, only Uber Technologies. On the contrary! The same way that a driver’s bottomline has the potential to suffer when fares are cut by Uber (which recently has caused drivers to protest around the country), accepting a steady stream of rides in areas where surge pricing is in effect makes driving that much more lucrative. It’s like, when the prices are surging, that’s when you’re REALLY able to make the money that Uber promises you can make as a driver without killing yourself driving in excess of 12 hours each day (which I never do but have heard of drivers doing).

Uber surgeLet me take a step back in case some are wondering what Surge Pricing is, exactly. Largely the most contentious aspect of the rideshare company, Uber Surge Pricing is defined as: The Uber fare rates automatically increase when the demand for a car is higher than drivers around you, the passenger. The Uber prices are surging to ensure reliability and availability for those who agree to pay a bit more. Basically, when EVERYBODY in an area wants a car, and there are less drivers to accommodate the demand, Uber will raise the price for the customers in that area. Uber Surge Manhattan On the driver’s app, we are able to see every area that is surging and decide, in that moment, if we will drive over to get in on the surge price action. It will be anywhere from 1.1x times the normal fare to, in extreme cases, upwards of 7x or 8x times what the fare would usually cost. In the past, Uber has come under fire for instating extreme surge pricing during major holidays like New Year’s Eve 2015 or during emergency crises like Hurricane Sandy in 2012. But, at some point of every regular day, it appears that surge pricing lite (as I like to call it) will be in effect, though it will usually stay around 1.1x – 1.5x what a passenger would normally expect to pay.

 

Uber surge 7x

 

As a driver, I consider driving over to an area where prices are surging tantamount to chasing a unicorn. I say this because, I’ve been in my car, looking at my app appear bright red in color (indicating that an area is seriously in surge), only to drive towards and arrive in that area and see the color intensity lessening in the map (indicating a return to normal pricing). So, with the excitement of possibly getting some fares that will be priced much higher than normal comes the disappointment that fifteen other drivers have likely driven to the area at the same time and have caused the fares to return. Or, however the algorithms and analytics work to determine when an area is coded tan (regular low price), yellow (likely to go up), orange (slight increase that’s worth the trip) or red (jackpot increase).  There have been times when I was watching the map turn from orange to tan in real time as I was driving to an area, and I’ve said, “I am literally chasing a unicorn right now…”  There have been other times when I get to an area, and BOOM! as soon as I hit the surge pricing radius, someone has requested a car for 1.3x times the normal rate. I’ll take it! At the end of the day, Uber ALWAYS notifies a passenger that Surge Pricing is in effect and requires that you accept the higher fare in order to even get a car. You can also request to be notified when prices have returned to normal, which can be a matter of minutes or a bit of a longer wait depending on how many cars are in the area.

Uber unicorn

As a driver, I LIVE for surge pricing, especially when considering the lower winter fare cuts. I’ve noticed that in my Bed Stuy neighborhood, surge is always in effect early in the morning during the week. Folks in the Stuy LOVE to Uber to work or school or wherever, and the same seems to be of the residents of Hoboken on the weekends, where I ended up one Sunday morning after unexpectedly taking a passenger through the Holland Tunnel. And while some people can take or leave Uber Surge Pricing, and others downright loathe the increased fare, for drivers, it’s the icing on the cake.

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