Rebalancing the marketplace
Surge pricing automatically goes into effect when there are more riders in a given area than available drivers. This encourages more drivers to serve the busy area over time and shifts rider demand, to maintain reliability and restore balance.
For drivers, it’s an incentive
Drivers are notified in the Uber app when demand increases through a map which shows the busiest areas and information about surge prices. The influx of drivers should mean there are more rides to go around.
For riders, it’s a premium
During surge pricing, fewer riders typically pay the premium. Rider demand decreases as some riders wait for more drivers to become available, and the marketplace rebalances.
Keeping it effective and accurate
Surge pricing works because it’s closely tied to the level of the marketplace imbalance. Here’s how we try to balance reliability for riders and drivers:
Surge pricing is automatically activated by algorithms that detect shifts in rider demand and driver availability, in real time, all over a city.
Because rider demand and driver availability change constantly, prices update frequently. Real-time updates help rider prices reflect supply and demand, and riders and drivers know what to expect.
To optimize reliability, the surge algorithm reacts to driver availability and rider demand at a hyperlocal level in real time.
Current driver availability and rider demand are the primary inputs to surge pricing. But we also factor in forecasts about market conditions. Additionally, when circumstances warrant it—such as in major emergencies that impact public safety—our teams assess the situation and cap surge pricing in the area.
Why surge pricing?
Surge pricing is a relief valve for the rideshare marketplace. Without it, when demand for rides exceeds the number of available drivers, riders would wait longer (or might not be able to get a ride at all). Drivers would have less incentive to accept requests in busy areas. Surge pricing helps restore balance to the network. By waiting a bit longer, riders can avoid the surge price.
Some of the features described on this page do not apply or are not available in California and in markets outside of the US. As we work to improve the marketplace, we may test functionality and pricing in ways not described on this page.