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Comment by darpa_escapee | Hacker News Reader

The purpose of surge pricing is to increase profits, the excuse is efficiency.

No, the purpose of surge pricing is to get more drivers out on the road. That, in turn, is to increase profits, but I'm fairly certain you could argue that pretty much anything any company does is to "increase profits"

Huh? Even by the charitable interpretation, the purpose of surge pricing is to reduce the number of drivers being requested (so that the drivers who are actually available aren't overwhelmed).

An increase in price both reduces the quantity demanded, and increases the quantity supplied. I've personally met Uber drivers who plan their work schedules around the times when surge is highest.

The purpose is to make supply closer match demand. If fares increase, more drivers will be willing to drive. If fares increase, less consumers will request rides.

You're correct in assuming that increased prices will reduce the number of drivers demanded. But you're wrong in assuming that the pool of available drivers remains static when prices increase.

I think you are missing the part where drivers get paid more during surge pricing. An increased reward entices more drivers to come out during that time.

Or motivation for drivers to deadhead to a surge area, or take a couple extra rides before taking a break/signing off the for the night.

Uber can try to optimize prices to: maximize revenue, maximize profit, or maximize volume of rides.

And there's no reason to expect that only the latter Uber has in mind.

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