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What do you mean by surge pricing?
In simple terms, when the demand for taxi rises or the number of users looking for a ride increases and there aren’t enough cars on the road, prices go up, riders can either wait or pay more for the ride.The increased amount to be paid by the user depends on the surge factor in the area. RoadYO – Our Uber Clone / Careem Clone by Appscrip, comes with a Zonal surge factor feature. With this, let’s understand how surge pricing works.
Demand for rides increases
There are times when a large number of people are requesting rides and there aren’t enough cars on the road to help take them all. Bad weather, rush hour, and special events, for instance, may cause unexpectedly large numbers of people requesting rides all at the same time.
Prices go up
In such situations of very high demand, we can start raising prices little by little to encourage more drivers to get on the road so there are enough drivers available to respond to the ride requests. This system is called surge pricing. This can be done by drawing zones on the map and associating a surge factor with them.
Riders wait or pay more
Whenever the rates increase due to surge pricing, riders are informed accordingly in the app. Some riders choose to wait a few minutes to see if the rates go back down to normal. As more riders start waiting to request, the number of available drivers on the road increases until once again the supply and demand are balanced enough.
In other words, the number of drivers on the road matches the number of trip requests. At this point, the surge factor can be removed to get back to the normal rates.
Surge Pricing On RoadYO – Uber Clone
RoadYO our on-demand taxi app & software has the following configurable surge campaign features to handle surge pricing:
- Setup surge pricing campaigns for different zones in the same city.
- The configurable parameters are the start & end date, start & end time, zones to be run in, surge factor(1x,2x etc) and vehicle type
- Detailed MIS (Management Information System) reports are available on the admin to determine which surge campaign was the most efficient, this gives more information to the management to plan their future campaigns.