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No, Uber drivers can’t game the ‘surge pricing’ system the way one driver claims

A video allegedly posted by an Uber driver claims to show how to manipulate the app to raise prices. (Andrew Harrer/Bloomberg News)

Uber's "surge pricing" algorithm is both critical to its success and a huge proverbial target on the company's back.

It is, Uber says, supply and demand in its most basic form: When drivers are scarce, and demand is high, prices go up.

That's good for drivers who are now being paid less on the Uber base rate since the company began dropping prices to beat the competition and generate demand. And it can be good for those who are desperate for a ride — and are willing to pay.

Critics say that surge pricing can result in truly absurd fares at peak times, and the company admitted making a misstep by allowing surge pricing to go into effect in the middle a natural disaster.

Recently, a video, purportedly from an Uber driver, was published online claiming to show a strategy that Uber drivers can use to manipulate the system by inducing higher and higher surge fares.

There's no narration of what's happening, but over the course of about three minutes, the "driver" demonstrates how to do this by accepting rides, then immediately canceling them. The person does this several times, and by the end of the video, surge pricing increases to 2.1 times the normal fare in some areas.

(The video, titled "Driving for surge," was initially posted publicly in April but has now been made private.)

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The video was also posted in a thread on a message board for ride-share drivers last week by a user who was labeled on the message board as a "well-known member." That person encouraged drivers to get "on the surge bus" and ride "to profits together."

Even if the strategy was plausible, it probably won't work for long, as other drivers on the forum quickly pointed out.

"This is a terrible strategy. You'll get deactivated within a week with that many trip cancellations," one driver commented.

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In a statement, Uber spokesman Taylor Bennett said drivers caught canceling rides to manipulate the system could face termination.

“Consistently canceling rides in an effort to manipulate the app or discriminate against riders is in violation of the contract that driver partners sign. Driver partners who do this may be deactivated from the system," Bennett said.

That being said, surge pricing in an entire city, where there might be hundreds or thousands of drivers on the road, is unlikely to be affected by the actions of a single driver — or even a handful of drivers.

Surge pricing kicks in when a lot of different users begin requesting rides and there aren't enough drivers. Sure-fire predictors for surge pricing: bad weather, rush hour or, perhaps, the time just before Sunday brunch.

Because Uber monitors every ride, repeatedly canceling rides is really just a good way for a driver to trigger enhanced scrutiny.

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Uber needs customers to continue to view surge pricing as a necessity that helps them ensure some level of service at high demand times, rather than a convenient mechanism for price-gouging.

And as Uber's CEO has alluded to before, bad drivers can be the company's Achilles heel. When customers have bad experiences with drivers — for any number of reasons, including randomly canceling requested rides — it reflects poorly on the company and hurts its bottom line.

On the other hand, the person who shared the video on the ride-sharing forum claimed that he has been "doing this for months" without hearing anything from Uber. It is unclear whether that is true, and Uber would not comment on the individual driver, who included his first name and license plate number in the video.

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But even if the company turns a blind eye to this sort of behavior from drivers, there's no reason to believe many other drivers will take the chance.

There are still plenty of drivers who won't risk deactivation by playing these games.

"I'm so excited to get a fare that I just accept every single one," one driver, Dan Bertsch, told KNBC.

And besides, there are easier ways for drivers to take advantage of surge pricing — by simply waiting for prices to go higher.