When I see the lightning bolt on my Uber app, I almost instantly feel a hateful resentment toward the corporate overlords standing between my next destination and me. The feeling is worse when I confirm that my fare is multiples higher than it otherwise would be.
Surge pricing produces a wide range of emotions for me. First, there’s anger, then indecision and finally, resignation. I want to be angry at Uber, but I shouldn’t be. Before you disagree, ask yourself a critical question: “Am I angry when a majestic bald eagle kills a cat and feeds it to its eaglets?”
Sure, I’m uncomfortable when I see a cat’s lifeless body being devoured by ravenous raptors, but it’s what they do. I can’t be angry at the bird for acting according to a natural order. In case you missed it, markets are decidedly friendlier to consumers than nature is to prey.
Most traditional cab companies charge the same rate all of the time and aren’t particularly responsive to customer demand. Uber’s dynamic pricing model is a beautiful market evolution. Supply and demand shift all the time. Why not use those forces in real time to allocate services in the most economically beneficial way possible?
If demand spikes, surge pricing prioritizes customers willing to pay a higher fee. Unlike the cat in the eagle talons, consumers choose whether or not to accept the higher rate. Uber’s convenience is indeed more expensive during a surge, but it’s frequently worth the extra cost. If it’s not, people won’t use the app. Surge pricing simultaneously creates a supply-side incentive for drivers looking to make more money by hitting the road. As the supply and demand level out, the surge pricing ends.
In that respect, I love surge pricing.
It’s market dynamics operating in real time to give me better options. As a fan of free markets, it’s incredible to watch. Uber makes more money because they’re more responsive to what people actually want and also able to be much more competitive in their base pricing.
It’s a win all the way around, but one that I absolutely hate every time I’m accepting a higher fare. If you’re not morally indignant about an eagle eating a housecat, quit whining about surge pricing. The market gives you choices the cat never had.