Surge Pricing – is it for you? Request a Quote Contact Customer Support

Surge Pricing – is it for you?


How to make more money for your drivers, keep your drivers loyal and OFF Uber with Dynamic Pricing.

Better known in the taxi industry as surge pricing or price surcharging, dynamic pricing is prevalent in every part of society these days from flights to hotel rooms to taxi rides.

Even Happy Hour at clubs and pubs is a form of dynamic pricing.

So, what exactly is dynamic pricing?

According to Wikipedia…

‘Dynamic pricing, also referred to as surge pricing, demand pricing, or time-based pricing is a pricing strategy in which businesses set flexible prices for products or service based on current market demands.’

Wikipedia has more to say about dynamic pricing in the taxi industry…

‘Dynamic pricing is also practised by on-demand transportation network companies such as Uber, Lyft, and Sprig.

Uber’s system for “dynamically adjusting prices for service” measures supply (Uber drivers) and demand (passengers hailing rides by use of smartphones), and prices fares accordingly.’

Of course, Uber has famously hit some spectacular own-goals with its early
dynamic pricing attempts.

They took a lot of flak in 2013 when they increased prices eight fold during storms in New York.

And Uber had to apologise after surge pricing kicked in during the December 2014 hostage crisis in Sydney, Australia.

They followed that apology by offering free rides to people who were evacuated from the area and their drivers still received payment at the higher prices.

But despite this bad press, dynamic or surge pricing in the taxi industry is here to stay and if used wisely, can give you a very powerful tool for attracting and retaining drivers, for keeping them loyal and importantly, for keeping them off Uber.

Dynamic Pricing – Making it Work for Your Drivers

One thing that apps like Uber have done is to introduce the idea of surge pricing or pricing surcharges during peak times.

This opens the door to local taxi businesses like yours to increase income and earnings for your drivers at busy (and often unsociable) times.

Naturally, we suggest that you do this in a much more passenger friendly way than more than trebling the fare as Uber sometimes do!

But having the ability to introduce a modest surcharge at peak times that you can share with your drivers is easy with a modern booking and dispatch system such as iCabbi.

For example, you could add a small surcharge of a pound or two to your bookings on a Saturday night between 6pm and 2am.

Assuming you apply just a very modest £1 surcharge to each booking, one of your drivers working that 8-hour shift and doing 3 jobs per hour will earn an extra £24! If your surcharge is £2 per booking, that’s an extra £48!

That could be an extra £100 or even £200 per month for your drivers!

This extra income goes a long way in helping to make your drivers happy and to keeping them loyal to your firm.

You may even find that they start recruiting other drivers for you as they tell their mates about the extra money they make working for you.

Dynamic Pricing – Making it Work for Your Customers

Price surcharges have bad press because of the dramatic multipliers that Uber is known to implement – as high as 3.5 times the base rate at peak times.

But because of the widespread use of dynamic pricing with businesses such as airlines and hotels (and now taxis), customers have become used to this way of buying products or services.

In fact, research shows that passengers rarely complain about small fare surcharges on a Saturday evening or at other peak times like Christmas and New Year.

Dynamic Pricing – Making it Work for You

With a modern cloud dispatch system like iCabbi, it’s easy to test different surcharges and times.

We suggest that you experiment with this idea as a great way to delight your drivers. You will quickly discover how much your customers will accept, at what times and around what occasions (such as big concerts and sports events).

If you have questions about dynamic pricing for your business or about iCabbi, please contact our friendly team of expert advisers any time by calling 01623 44 22 11 or emailing