Want to Avoid Uber Surge Pricing on Halloween? This Study Has Tips

As the Chronicle reports, the study, “Peeking Beneath the Hood of Uber”, looked at surge pricing in San Francisco and New York. They’ll be presenting their findings this Friday at the 2015 Internet Measurement Conference in Tokyo.

Researchers Le Chen, Alan Mislove and Christo Wilson created 43 new Uber accounts and virtually hailed cars over four weeks from fixed points throughout San Francisco and Manhattan.

Behind that idea is an algorithm, which promises to keep supply and demand in constant balance, encouraging drivers toward busy areas and tempering customer requests by increasing the price of each ride.

“We’ve seen this work in practice day in day out, in cities all around the world”, Uber’s statement continued.

Now, based on the location and pricing of cars Uber offered these 43 virtual users, the researchers were able to find out how surge pricing works, and ultimately, how to combat it. Wilson stated that most price surges are over in five minutes, so waiting to book a ride may just shave 10-20 percent off of your Uber fare. In fact, a few Uber drivers actually head away from areas with surge pricing, knowing that falling demand is likely to leave them without customers.

Wilson, Mislove, and Chen aren’t the first people to try to reveal Uber’s secrets with data.

Surge pricing has also faced a few criticism from drivers, who Wilson says aren’t given enough time to respond to the surges and have to deal with demand that reflects the need for rides from five minutes earlier, NPR reports. And academics and data journalists have also used Uber and taxi data collected by New York City regulators to analyze Uber’s impacts on travel trends. Day in and day out, the researchers’ virtual sentinels tracked cars and compiled data. Prices surge in Manhattan about 14% of the time, while San Francisco surges 57% of the time.

But overall, the study has a dim view of Uber’s surge pricing methods. If only we could take a look at that analysis ourselves. “We’re pretty obvious. But they just weren’t looking”, he said.

The market between Manhattan and San Francisco are obviously vastly different, and this too was observed in the study.

They made a few fascinating discoveries.

The researchers also went into Uber forums where they learned that drivers colluded to drive up the price. They are manually demarcated sections of a particular city, each with its own independent price based on intensity of demand at a particular point in time. Without surge pricing that night, “ride requests skyrocketed and only 25 percent of these requests were completed”, Uber said. “On the other hand, it also appears to have a larger, negative effect on demand”. They’ve conducted a study showing that surges don’t necessarily lead to more drivers.

“People love Uber because they can push a button and get a ride quickly and reliably-wherever they are in a city”. “Two users standing a few meters apart may unknowingly receive dramatically different surge multipliers”.

“We have not gotten any job offers”, Wilson joked. Then they studied Uber cars’ comings and goings, and eventually combined that research with Uber’s publicly available tools and information to analyse how they correlated with surge prices. That’s much larger than the effect Wilson and his colleagues observed.

Wilson called his survey style “algorithmic auditing”.