Everyone Hates Uber’s Surge Pricing – Here’s How to Fix It

Letto da: Fleet Cooper
Durata: 7 min
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Sintesi dell'editore

During periods of excessive demand or scarce supply, when there are far more riders than drivers, Uber increases its normal fares with a multiplier whose value depends on scarcity of available drivers. This so-called surge pricing uses microeconomics to calculate a market price for riders and drivers alike. The goal of surge pricing is to find the “equilibrium price” at which driver supply matches rider demand and riders’ wait time is minimized. Studies show that surge pricing achieves what it was designed to do: it brings more drivers online, and it allocates available rides to those who value them more.

©2015 by the President and Fellows of Harvard College, All Rights Reserved (P)2015 Audible, Inc.

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