Have you noticed you’re not getting as many Surge or Prime Time requests as you did in the past? There could be a reason for that. Today, senior RSG contributor Christian Perea analyzes what’s happening with Surge and Prime Time, why it’s happening and what drivers can do about it.
I think most drivers have noticed that there’s a lot less Surge on the road nowadays. Personally, I’ve noticed that over the last 6 months it’s almost completely disappeared in San Francisco. Where I once could reliably get a 2.0x in Soma everyday at 4 p.m. I can now only maybe get a 1.25x once or twice a week.
If you rely on big Surge/Primetime rides to make ends meet, the future probably isn’t bright for you. The days of sniping multiple $70+ surge rides from big events, traffic bottlenecks, and clever positioning are mostly over. There are still some chances out there but they are very rare. Of course I’ll still take them if I see an opportunity 😉
In the past, once a driver got a ride they were “locked in” to that specific rider until the ride was completed. The dispatch system for Uber and Lyft more or less sent the closest car that was “available” without a present ride. This was rather inflexible and the result was fairly predictable Surge and Primetime. It made me lots of money. Things have since changed though because…
The Apps Can Handle More Rides With Fewer Drivers
Both companies have devoted some of their best engineers to figuring out how they can rearrange and advance their dispatch systems to make dynamic pricing a rarity. Uber and Lyft want very little dynamic pricing because they firmly want their app to offer the most reliable platform with the cheapest rides and lowest wait times.
Here are some features that have helped them get rid of dynamic pricing in the last year:
A big factor in reducing Surge involves back-to-back rides. It allows for drivers to “stack” a 2nd ride when they are in the last few minutes of their current ride. This means that 2 passengers are effectively assigned to the same driver for a few overlapping minutes.
This plays a big part in reducing Surge because the system can now “balance” the number of incoming requests with available drivers more effectively. If there are 100 drivers in an area and each of them have a rider in their car, we can suppose that 25% of them are in the last leg of their current ride. So adding new requests at the end of the rides that are ending is like instantly adding an extra 25 drivers!
This feature is mostly still in testing with Uber and Lyft, but it basically works by providing drivers with information on where to go for a ride based on historical data, time of day, and other factors. Each suggestion is different for each driver.
These maps help Uber and Lyft “spread” drivers around a city in real-time by nudging them on where to go for their next ride. If they can put a driver closer to where requests will originate using historical data, then it drastically reduces the time it takes to pickup a passenger. If this saves an average of 3-5 minutes per ride, than it quickly adds up to make the entire app more efficient and reduces the likelihood of surge.
So in the near future drivers might end up chasing heat maps for rides that don’t even have surge/prime-time!
The Pickup Switcharoo
Both apps will now assign a new ride to you if a newer request occurs while you are driving to your original passenger. For example, if you are already driving to a passenger who is 5 minutes away and a new passenger starts a request that is only 1 minute away, it switches the ride.
The “switch” means that pickup times for passengers are reduced and they provide some leeway for Uber and Lyft to “reorganize” the ride requests that are coming in during a busy period.
Boost and Quest Ensure There Will Always Be Plenty of Drivers
Lyft calls it “Power Zones” and “Power Driver Bonus” but it’s basically the same thing. Boost ensures that drivers will go to a certain area at a certain time in hopes of getting a boosted ride. It certainly works because during boost times in San Francisco, the streets are inundated with nervous Prii praying for an airport ride. It definitely works.
Quest and Power Driver Bonus make it so full-time drivers are on the road as often as possible. Lyft’s “Power Hours” (which REALLY suck) even go as far as making sure drivers target the busiest hours each day. Regardless of what you think of these promotions, their intentions are clear: keep drivers on the road.
Are UberPOOL and Lyft Line to Blame?
Most drivers would blame shared rides on killing Surge and Primetime because more people could be placed in a single car. However, I actually think this had very little effect on it, since they just brought on more passengers who were otherwise unwilling to spend $10-$15 for a single ride. In my judgement, POOL and Line cater to budget/bare bones passengers who otherwise wouldn’t call a car in a given situation.
In fact, when Lyft Line and UberPOOL launched in my market, I saw A LOT more Surge/PT as both companies heavily subsidized the rides for passengers.
However, I think a lot of the tools and technology for making the dispatch systems more advanced stemmed from UberPOOL and Lyft Line. So in a way they were the beginning of the end for dynamic pricing.
Pushing The “Never Ending” Ride Narrative
I will say that these changes have resulted in a lot less downtime and dead miles for me. They are much more efficient than the previous system and in many ways they are smoother too. It seems like Travis Kalanicks vision of the “never ending ride” is coming together quite nicely. Afterall, I’m definitely giving more rides than ever before!
That’s all fine and dandy, but at the end of the day it just seems like I’m doing a lot more driving for slightly less money. A lot of the time it feels like I’m working my tail off for several hours only to take a look down at my earnings to see that I’ve only earned $45. Ouch!
As Uber and Lyft mature, they are going to continue to push drivers away from dynamic pricing because they have relatively little to gain from it. It looks bad to the press, the passengers, and they simply want to provide the cheapest rides with the shortest ETA’s. It doesn’t matter if it means we have to give more rides to make the same amount as before.
Afterall, the less we make per ride, the more we have to drive right? Sounds like a good deal for them…
Readers, have you noticed a decline of Surge or Primetime rides in your city? Let us know in the comments!
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-Christian @ RSG