Among Uber drivers it is well known that not all surge indicators turn out to be truthful, i.e. when the driver arrives in the indicated surge area the jobs he is getting are just at the level of normal base rate [0]. The idea behind Uber’s surge pricing system is to match the driver supply to the rider demand by putting out surge multipliers or add-ons (to the normal base pay) for certain areas, to incentivize drivers to go there, and likewise increasing prices for riders.
Guda and Subramanian [1] analyze surge pricing from a management perspective and find that „the platform may have an incentive to misreport market forecasts by exaggerating the need for workers to move“, in other words they propose that platforms misreport demand information to strategically control their workforce.
Sometimes it is reported that drivers use either the rider app or external apps to find out if the surge might be real, e.g. Surgeapp [2], TrackSurge [3].
In her paper ‚On Algorithmic Wage Discrimination‘ (2023) [4] Dubal reports based on an interview with an Uber driver that many of the drivers organized in groups to collectively verify the surges:
„Many explained that they were on group texts with other drivers who would ‚call out‘ fake surges. After being added to one of these text threads, I received text messages that alerted drivers to avoid certain areas (e.g., ‚I’m in the Marina. It’s dead. Fake surge.’).“ (p. 38)
[0] https://ridesharedriversunited.com/fake-surge-how-uber-is-misleading-its-drivers-customers/
[1] Guda, H., & Subramanian, U. (2019). Your uber is arriving: Managing on-demand workers through surge pricing, forecast communication, and worker incentives. Management Science, 65(5), 1995-2014.
[2] http://www.surgeapp.org/
[3] https://play.google.com/store/apps/details?id=net.jerryhuang.WeTheDrivers&hl=en_US&pli=1
[4] Dubal, V. (2023). On algorithmic wage discrimination. Available at SSRN 4331080.