Surge pricing balances supply and demand:
Inputs:
- Current ride requests per zone
- Available drivers per zone
- Historical patterns (time, weather, events)
- Real-time traffic conditions
Algorithm: Divide city into hexagonal zones Calculate demand/supply ratio per zone Apply multiplier curve (e.g., x demand = x price) Smooth across neighboring zones to avoid sharp boundaries
Update frequency: Every few minutes. Too frequent causes price instability.
Driver incentives: Show surge zones to attract drivers. Heat maps guide repositioning.