Thanks for writing this.
Dan Prisk

Interesting thoughts. I’ve thought about surge pricing a lot as well — and I do think it works well. But let me explain my reasoning and do discuss!

There was obviously going to be a huge gap in supply and demand on that night. There would be more riders than drivers and it is inevitable that some of the riders would have to wait. Given that fact, we now need to figure out a way to decide which rider is matched to a driver. Here are some methods:
1. The surge pricing method simply matches drivers to whichever rider is willing to pay the most (in a sense)
2. It could be first-come first-served (FIFO), in which whoever requested a ride first, gets to ride first. Lots of people would have had waiting times in hours, which can be reasonably equated to the same experience as not being able to pay surge pricing.
3. More ways…

Of surge pricing and FIFO, wouldn’t you think that surge pricing is actually the one that would encourage more drivers to come and bridge the gap? In fact, the people with the most “need” (for say, money) actually now have a way of driving and getting paid a premium since the demand is high. Encouraging more drivers to come out also helped more people that “needed” the rides to get them.

What did you mean by “need” in your comment — I am curious. There could be ways to figure that out and further, come up with better ways to distribute. I feel like giving to the highest payer isn’t the ideal way, but still among the best that I have heard. However, we do need to discuss and find out the ideal case!

Like what you read? Give Mayank Sanganeria a round of applause.

From a quick cheer to a standing ovation, clap to show how much you enjoyed this story.