Getting the most from Surge Pricing
The weekend is upon us and it seems we have a lot of new drivers going into the fall season. I want to give you a break down on how surge works for both Uber and Lyft.
Last year, Uber and Lyft changed their dynamic pricing schemes to a flat based amount. While I originally did not like this new change, along with many other drivers, I have come to enjoy it, once I figured out how it works.
One of the main reasons Uber and Lyft gave to justify changing their pricing scheme, was that it would make surge “more predictable” This is far from the truth, unless you know how it works (which they likely didn’t tell you)
For starters, Lyft sucks when it comes to surge (what is commonly called a bonus box, a purple box, with a pink box in the middle that appears on your app. Each color has a different $ amount. When I decide to pick up at 2am, or at a large event, I log out of Lyft about 30 minutes prior.
You see, dynamic pricing is based on rider demand vs. driver demand. Lyft Express (rental vehicles from Lyft) is a staple of the Houston market. For a driver to justify doing a car rental for $250 a week, they have to pick up something like 75 rides on Lyft. They can not use the car for Uber, since the insurance is not in their name. They can not rely on Uber for better earnings. They have to pick up as many rides as they can, when they can. Therefore, they will be there picking up drunks at 2am, picking up from an event that has traffic for an hour, etc. At the same time, Houston is primarily a Uber market. In Lyft’s case, there is little bonus boxes because there is simply enough drivers online per the amount of riders.
Uber on the other hand, is almost guaranteed to have a surge at a large event, like a concert, and for sure at 2am in Downtown Houston.
Like Lyft, Uber’s app shows you a flat dollar amount. However, you may have noticed that sometimes this flat dollar amount is sometimes more at the end of your ride.
Why does this happen?
There is only one time this happens. When it first came out, we thought this was based on distance or duration of the trip. This is not the case. What it is based on, is what the rider pays. If it is not surging for riders, it is not going adjust to a higher fare. The more the rider pays, the more it adjusts and you get a higher fare at the end. It should be noted, that Lyft does not adjust the fare. Whatever is in the bonus box, is what you get.
There are three ways you can see if the riders are being surged.
1) Open your Uber (rider) app and get a fare estimate. The app will tell you if it is higher, but it won’t tell you how much. You just have to know the price before hand, and divide that by what Uber is charging now. i.e. if a regular $10 ride now costs $40, the rider is being charged 4.0x. (longer rides = higher fares for customer = more money passed down to you).
2) The Surge 2x app (iTunes), is what I use. It is free but I believe it is only available on the iPhone. I have been using it for years. The best thing about this app is that it tells you the actual multiple amount and often updates surge information, before the Uber app does. (Although, if it says 2.9x – that is what the riders are paying, and not what you are getting. But, the higher the surge multiplier, the more your fare will adjust.)
For Android users: Try No Surge for free. Although made for riders, it should work as you are trying to figure out when riders are not being surged. If you had any experience with this one, or another one, I would like to hear your comments below.
3) The Uber driver app of course. Generally speaking, the higher the amount listed on the app, the more the rider is getting adjusted.
I can not stress enough that if a rider is not being charged more, your fare will not adjust.
One of the greatest things about the new surge, is that both Uber and Lyft allow you to drag it around for as long as you want. Uber, is as soon as you get it, but Lyft will not hold your bonus amount until the box you are in is grayed out. Sometimes this takes 30 minutes. If you leave before it is gray, or miss a ride you will lose that bonus amount. Uber, you can “pick it up and drag it” until a ping comes in.
But you see, if riders are done requesting, and now you have a $5 bonus you want to hold on to, you may want to keep driving until you find one. Is it worth turning off another app and driving an hour extra just for $5? Probably not, if the riders are not being surged, you are ONLY going to get that amount. So use your discretion. As a general rule of thumb, I log out and go home when the surge ends for riders. Sometimes you will see $15-$20 boxes, flat rate amounts, and those are always worth driving a bit more to see if you can find a rider. But if it is $2-$5, oh well.
I heard drivers log out to wait for the surge. Is this true?
Yes, this is true. There are lots of drivers that wait somewhere with the apps logged out, waiting for surge. I will admit to doing this to. I am not going to pick up from a concert, and deal with the traffic if I feel I am not getting paid enough. There are times I simply head home without a rider.
Is it against policy? I heard of drivers being deactivated for this.
It only becomes against policy when you start organizing drivers together (collusion) to log out in order to increase the surge. And yes, you can be deactivated, just ask drivers at Los Angeles airport. Taking a break before the big rush is not against policy.