As a rideshare driver, you have likely heard of SURGE pricing. This bonus can make all your completed rides a bit more profitable, and most people are familiar with how SURGE works on a fundamental level.
Beyond the general concept, many miss out on the more profitable details of SURGE pricing. Worse still, the majority of new Uber drivers are not aware of how to take advantage of these lesser-known useful bits of info.
Let’s start off with the basics.
SURGE pricing is used during high demand periods. This occurs when a bunch of ride requests comes in at the same time within a particular area. Of course, if enough drivers are working at the time, the SURGE will not go into effect.
Many rideshare companies apply a bonus to encourage drivers to start working when there are more passengers in need of a ride than there are available drivers.
Now that we have that out of the way, here is the million dollar question: How can Uber drivers capitalize on SURGE pricing other than the obvious?
Furthermore, is there a way to get these profitable rides more often? We will discuss the answers to each of these questions and show you how to go about accomplishing them.
- What is SURGE Pricing?
- How Does SURGE Pricing Work?
- How Drivers Can Make More During SURGE
What is SURGE Pricing?
According to Uber, “fares may increase to help ensure those who need a ride can get one.” Drivers can earn more per ride with this bonus, while riders pay more to ensure they get a ride immediately. Of course, passengers do not have to pay for SURGE pricing. They always have the option to get a ride at a later time, when SURGE pricing is no longer in effect.
To learn a bit more about how Uber determines when to put a SURGE into effect and how it works, check out this article.
Since rideshare drivers have the luxury of choosing when to work, chances are there will be a lapse in coverage when riders are ready to go somewhere. Rideshare companies started applying a dynamic price feature to avoid potential profit loss. This applies to situations where the ratio of drivers to passengers is unequal, such as when an influx of ride requests come in and very few drivers are working.
By raising the price of each fare during these peak times, rideshare companies can ensure that no lapse in coverage occurs. This translates to high customer satisfaction, faster pickup times, and driver happiness due to an increase in profits.
Needless to say, whenever SURGE pricing is in effect, drivers are usually incentivized to venture forth into SURGE areas. This is very beneficial for passengers seeking a ride in a major metro area when rush hour can leave them stranded in a traffic jam.
Outside of this type of scenario, SURGE pricing can go into effect any time drivers decide not to work. One of the most common ways that this occurs is during severe weather.
Passengers do not want to drive in terrible weather and chances are drivers do not want to either. Due to this reluctance on both ends, SURGE pricing may go into effect.
Other noteworthy examples include the time of year. Holidays, for example, can result in high SURGE prices. Another example would be major local events, such as festivals and big-name concerts.
To find out more information about the role SURGE pricing plays, check out this Ridester article.
How Does SURGE Pricing Work?
According to Uber, “When prices are surging, you’ll see a multiplier to the standard rates on the map. For example, you might see a SURGE at 1.8x or 2.5x.
This is how much your base fare will be multiplied by, so a fare that is usually $10 would be $18 when it’s at 1.8x SURGE. Uber’s fee percentage does not change during SURGE pricing.”
Each rideshare company handles these high demand periods differently. To get an in-depth look at the differences between the two major rideshare businesses, check out the sections below.
Uber Surge Pricing
Any time the demand increases in a given area, drivers will be able to see a change in the map on their app. More specifically, the SURGE zone with change colors in the Uber app. Dark red areas mean a high surge ride multiplier, while light orange areas mean a smaller multiplier.
This color change can occur in any neighborhood, so be sure to zoom out on occasion to see whether an area near you is experiencing the peak.
Of course, if you are already in the area or nearby, you can zoom into the highlighted area. By doing so, you will be able to see the current SURGE price offering. Be sure to pay close attention to this information.
Reviewing each listed price can help you determine which area is the most profitable one to be driving in at that particular moment in time.
In general, each color on the map represents a different price point. The lower SURGE multipliers are light orange. Although these smaller multipliers only raise your profits slightly, they can be worth it if you are near.
At the other end of the scale is the dark red shade. These areas show that a significant multiplier is in effect. Needless to say, if this shows up on your map, that is where you want to be.
Unless, of course, that area is way across town and you will not be able to get there on time. Due to this financial dilemma, it is well worth it to check the potential ride requests before heading out. By doing so, you can make an educated decision in regards to whether it is worth it to accept a ride request at that time.
Lyft Prime Time
According to Lyft, “When demand for rides is higher than the number of available drivers on the road, passengers may pay an extra percentage on top of the base ride amount. For example, a ride that is $6 without Prime Time, costs the passenger $9 when 50% Prime Time is added. Prime Time only adds a percentage to the ride subtotal, which is calculated before the Service Fee, taxes and airport fees, or other additional amounts. For Shared rides, Prime Time is calculated based on the first passenger that a driver accepts in a chain.”
As you can see, Lyft applies a percentage to the price of the fare, rather than a multiplier.
Although Lyft handles this differently than Uber, the same principle applies when it comes to payment, except for one tiny detail. Guaranteed Prime Time.
Lyft offers this static bonus to drivers as a way to ensure that drivers are getting paid during busier periods, like rush hour.
How Can You Leverage SURGE Pricing?
Now that we have covered some of the ways you can capitalize on SURGE pricing when it occurs let’s dive a bit deeper. As we mentioned before, there are other ways to take advantage of this valuable perk.
Listed below are a bunch of extra things you can do to ensure that you can get the most out of SURGE pricing in your area.
Turn on SURGE notifications
We get it. You likely get enough notifications as it is. Adding this one to the list of notifications may seem a bit much; yet, it can increase your weekly paycheck. By a lot.
Rideshare companies have developed this feature to alert any off-duty driver when SURGE pricing is active.
Due to this, if you have SURGE notifications on, you will see the alert on your home screen.
Furthermore, this will inform you of the areas nearby that are experiencing SURGEs.
Drivers can review in-app earning reports to see when SURGEs happen most often. This way, you can discover when the highest paying time frames are and prepare accordingly.
Prepare to Drive During Big Events
Once you have a game plan in effect in regards to when to drive during SURGE pricing you can ensure most of your rides will be more profitable.
This is possible if you live in a major metro area. There is a sure-fire way to increase the odds of driving during SURGE pricing.
To do this, take note of when significant events are happening in your area, such as concerts or festivals. Then, use this information to map out your monthly work schedule.
If you have a vehicle that can handle inclement weather, do not be afraid to face the elements and work. Most people do not want to drive during these time frames, which increases the likelihood of SURGE pricing going into effect.
Make sure that you can handle driving during these time frames. Do not go out of your way and risk your livelihood for extra money.
Know When SURGEs are Likely to Happen
Now that we have reviewed the most common reasons for SURGE pricing to go into effect, let’s go over the specific times when this might occur.
Rideshare drivers that live in a big city are going to discover that SURGE happens often on Friday and Saturday nights. So, be ready to journey out into congested areas as the weekend approaches.
Every city is unique. Due to this, the SURGE may fluctuate beyond the standard time frames. Since this can be pretty random, be sure to stay in tune with the goings on in your city.
Rideshare companies want to keep drivers happy by letting them be their own boss, work their own hours, and have the freedom to earn an income from the comfort of their vehicle.
Unfortunately, this can lead to coverage gaps for passengers. Rideshare companies use SURGE pricing to reduce the odds of this happening.
This area-specific bonus can apply to any neighborhood at any time. The top reasons for the SURGE to go into effect are significant events, severe weather, and an imbalance in the ratio of drivers to passengers.
Drivers can take steps to get the most out of this bonus. Noteworthy tactics include using the SURGE pricing color scale, tracking when the SURGE is likely to occur, and mapping out the major events in their city.
Knowing what is going on in your town when a SURGE happens will help you prepare for future scheduling.
Remember, what works for one driver in their location may not work for you. Every area is different, even if they are only a few blocks away from each other.
By taking the time to get familiar with your city and the events that unfold there, you will be able to maximize the likelihood of driving during the SURGE as well as increasing your profits due to implementing this strategic plan.
Brett Helling is the owner of Ridester.com. He has been a rideshare driver since early 2012, having completed hundreds of trips for companies including Uber, Lyft, and Postmates. In 2014 he acquired Ridester.com to share his experiences with other drivers. His insights are regularly quoted by publications such as Forbes, Vice, CNBC, and more. He is currently working on a book about working in the Gig Economy, expanding his skill set beyond the rideshare niche. Read more about Brett here.