Why prices vary by place
When many riders want trips in an area but few drivers are available, wait times balloon. Surge pricing raises a multiplier in that area to damp demand and pull more drivers in, restoring balance. The computation is fundamentally local, tied to a geographic cell, not a global number.
The pipeline
- Aggregate per cell. Count open requests and available drivers within each geo cell over a short window.
- Compute a ratio. A demand to supply imbalance maps through a curve to a multiplier.
- Smooth it. Apply hysteresis and caps so the price does not flicker wildly between updates.
Serving and trust
- Multipliers are published per cell and looked up at quote time by the rider location.
- Changes are rate limited and bounded so the experience stays predictable.
- The quote shown is locked for a short time so a rider is not surprised mid request.
Key idea
Surge pricing aggregates demand and supply per geographic cell into a smoothed multiplier that nudges the local market back toward balance.