When Uber first came on the scene in the 2010s, it was unprofitable for years, propped up by venture capital funding to grow its market share. Now, Uber is pulling in record profits, enabled by slashing driver wages and price gouging customers.

Much of those price hikes are due to surge pricing, which takes advantage of increased consumer demand to raise prices, betting on the likelihood that customers will be willing to accept the price hike in exchange for the convenience of finding a ride at opportune times. This increased revenue is generally not passed onto the driver.

Apps that traffic in convenience like Uber and Lyft are not naturally profitable, and their staying power depends on raising prices as high as they can get away with while simultaneously making it difficult for consumers to avoid them. Uber’s surge pricing model has helped them achieve market dominance and record profits, and businesses in other sectors are beginning to adopt the same questionable business model.

For our June 2024 special issue on pricing, Sarah Jaffe wrote about how rideshare apps made surge pricing a mainstay of the modern consumer economy, hurting customers and workers alike—and how only a movement centered on worker justice can end algorithmic corporate greed. You can read the full story here.

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