What is Uber "surge pricing"?
Uber "surge pricing" is an automated system that Uber uses to balance the number of available Uber drivers in an area with the number of people requesting a ride from Uber. By balancing out supply and demand in this way, Uber is able to continue having their taxis reach customers quickly and reliably. "Surge pricing" usually kicks in during times where there's high demand for an Uber ride, such as during a holiday, a weekend night, or inclement weather.
Here are the mechanics behind it:
When there's a high demand for Uber rides in an area, but few Uber drivers, Uber uses "surge pricing" to increase the price of Uber fares for that area.
The demand for Uber taxis in the area likely drops, since some people may look for other transportation options rather than pay the higher Uber fares.
At the same time, more Uber drivers are likely drawn to the area, because they make more money when people are willing to pay higher fares to get an Uber ride.
Once the supply of Uber drivers and demand for Uber rides balances out in an area, Uber decreases or discontinues "surge pricing" for that area.
How does Uber "surge pricing" work in practice?
Basically, when you request a ride from Uber, you may sometimes get a message that "surge pricing" is in effect, and your fare has increased because there are not enough available Uber drivers in your area to meet the demand from ride requests. In that case, you'll see a screen like this:
As you can see, Uber will tell you how much your fare will increase by, as well as how long they expect this increase to last (though it may not drop; in fact, it may increase even more!). You have three options at this point, which we highlighted:
Use UberPool to see if you can share a ride with someone (see our UberPool tutorial)
Get Uber to notify you when surge pricing drops or ends, and wait it out
Request a ride with Uber at the current rate anyway
If you decide to accept the current rate, you will be asked to confirm this on the next screen. Use the (virtual) keyboard on your mobile device to type in the rate multiplier.
From there, just continue on with the process of booking and having your Uber ride!
That's an explanation of Uber's "surge pricing" and how it works!