NYE Surge Pricing Explained
December 31, 2011
In the last several days, we’ve received a ton of questions about how reliable Uber will be on New Year’s Eve. “Will there be a car available?” “Can I count on you guys for the New Year’s festivities?”On New Year’s Eve, yes that’s tonight :), we are aiming to provide a reliable ride to anybody who needs one, no matter how crazy demand is or what is going on in the city. We won’t be perfect, but we’ll be damn close; and as you might expect, there’s a price to that kind of reliability and convenience during such a massive spike in demand. We’re rolling out what we call Surge Pricing in order to achieve such a high level of service on NYE.How does Surge Pricing work?We raise price when supply of available cars gets tight. [Example: If there are 300 cars up in a city and 290 of them are picking up a rider or in trip, then this would be considered an extremely tight supply situation.] We raise the price in increments over time based on supply health. When supply opens up, we then lower the price.How does Surge Pricing maximize the number of Uber rides?We are able to get a far greater number of drivers on the system when Surge Pricing is in effect – it’s basic economics. Higher prices encourages more supply to come online. It gets some drivers out to work on NYE. It keeps other drivers from going to alternatives like renting their car out for the night, or trying their luck at hustling rides on the street. Higher prices means more cars, means more rides, means more people getting around the city efficiently, safely AND in style Why does Surge Pricing make for Uber reliability?When we start seeing a shortage in supply, we raise the price. We continue to raise the price until demand begins to wane. Assuming we raise price quickly enough to maintain healthy supply, there will always be an Uber ride available.How do Uber riders know the price?
- Our prices are clearly displayed on our website.
- Any surge pricing event is accompanied with a notification of what the price increase is vs. normal rates before a request is made (riders must OK through the notification), as well as immediately after the request in case they want to cancel before the car arrives.
If you’d like to know more, read our Halloween Surge Pricing post.Happy New Year!Travis
Uber Co-founder, CEO