Chart of the Day: New York City Uber Effectiveness with and without Surge Pricing

Here’s an interesting chart from The Economist (sent in by Board Member Dana Demaster) that centers on the effectiveness of “surge pricing” as used by Uber in Manhattan.

Here you go:

The concept of surge pricing is something that comes up a lot in urban design discussions, especially around solving issues like parking, transit fares, and congestion. The key idea is that you make price dynamic to reflect demand, a basic economic principles.

Here’s the explanation from the article:

Surge (or dynamic) pricing relies on frequent price adjustments to match supply and demand. Such systems are sometimes used to set motorway tolls (which rise and fall with demand in an effort to keep traffic flowing), or to adjust the price of energy in electricity markets. A lower-tech version is common after natural disasters, when shopkeepers raise the price of necessities like bottled water and batteries as supplies run low. People understandably detest such practices. It offends the sensibilities of non-economists that the same journey should cost different amounts from one day or hour to the next—and more, invariably, when the need is most desperate.

The same principle would hold for things like parking meter charges in downtowns, or access to special lanes during rush hour (e.g. the little-used MNPass lanes). Or maybe something like charging more for your AirBnB room during the Super Bowl…

Questions emerge: Is surge pricing inherently unfair? If now, where else might this kind of system be put into place?

Bill Lindeke

About Bill Lindeke

Pronouns: he/him

Bill Lindeke has writing blogging about sidewalks and cities since 2005, ever since he read Jane Jacobs. He is a lecturer in Urban Studies at the University of Minnesota Geography Department, the Cityscape columnist at Minnpost, and has written multiple books on local urban history. He was born in Minneapolis, but has spent most of his time in St Paul. Check out Twitter @BillLindeke or on Facebook.