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Uber's Price Surges May In Fact Chase Drivers Away, Report • Mirror Daily

(Mirror Daily, United States) – Uber is often like a teenager who can’t make up their mind; whenever local price surges are signaled, there’s a collective cloud of consternation and controversy rising above the city.

The San Francisco-based company has long explained the higher prices as a way to persuade more drivers to get out on the road, but according to a team of computer scientists at the Northeastern University, this isn’t necessarily the case. Researchers Alan Mislove, Le Chen, and Christo Wilson conducted an experiment that proved price surges may in fact chase drivers away.

After creating 43 new Uber accounts and hailing cars for 4 weeks from the same points throughout Manhattan and San Francisco, the team found a lot of drivers actually avoid surge areas anticipating the significantly fewer ride orders.

Uber drivers usually agree on this: surges kill demand, which means drivers will actually drive away from the surge and not towards it. However, Uber has stuck by its claim when contacted for comment this week, saying that internal analysis has shown that surge pricing is, in fact, a move that leads to more drivers to surge areas.

Molly Spaeth, spokeswoman for the private cab-hailing company, wrote in an e-mail explaining the new report’s fault is that it works with “extremely limited, public data,” and the reality is that the surging strategy seems to be working everywhere around the world.

Researchers also revealed some tips about how surge prices can be avoided. Sometimes changing your location, even by a few hundred feet, could give you a different price and get you out of the surge area. Also, waiting a few minutes before placing the order can get you back to normal fare levels.

Presented at a conference in Tokyo on Friday, the study explained that because a lot of the surges are short-lived, Uber passengers should be able to get lower prices by simply “waiting-out” surges, instead of accepting the inflated costs.

It might seem random, but Uber’s price scheme has divided cities into “surge areas” and each one has its own independent prices; Uber hasn’t made it available for consumers to know where the boundaries are. The researchers discovered that two users might have “dramatically different surge multipliers” while ordering from just a few meters apart.

Based on data collected in April and May of 2015, the authors created some maps of where the boundaries in Manhattan and San Francisco are, which revealed that Manhattan Uber users have a better chance of crossing from current surging to non-surging zones because the assigned areas are smaller, and therefore more walkable.
Image Source: Greater Malaysia

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