Ride sharing companies have taken a lot of slack for their invention known as "surge pricing" (although they would prefer that you call it, "dynamic pricing".) The idea of surge pricing is that, during busy/peak cab-fetching times (New Year's Eve at 1am, for example), the cost of a ride can be 10x the normal off-peak rate. (Some states have limited these surge rates to only 2x, but this doesn't change the fact that the companies would like to charge you 10x.)
People have accused these companies of "price gouging". They say that the companies are charging the public more precisely during the time that riders most need a ride. Indeed, once someone is away from home and needs a ride home, they're more likely to pay more than if they were at home deciding whether to go out.
Additionally, people say that there is a humanitarian element too. They say that it's bad to encourage tipsy drivers into vehicles. They say that single women shouldn't have to make a decision whether to get a ride home from the guy with wandering eyes and hands.
Recently, in Australia, Uber was chastised for enabling surge pricing when people, in fear for their lives, were trying to get out of the heart of Sydney due to some reports of terrorists (actually, hostage takers.) What probably happened was, some operator in California, noticing the surge in requests for rides, and enabled surge pricing, completely unaware of the crisis.
Indeed, the companies claim that surge pricing isn't gouging; it's a means to provide a higher supply of rides. They claim that it's a total coincidence that it happens to raise their revenue.
To highlight one of reasons people dislike surge pricing, it means that one can't trust the company for a ride home. That is, while one can get the price of a ride to a destination, there's no guarantee about the cost to get back. When you make the decision to rent a ride somewhere, you actually have to account for the round trip, which could be 3x the one-way cost. It's not as though you can, when you want to go home, see the surge price and say, "No, thanks. I'll walk home and get my car."
There are solutions to these problems, so one has to question the companies' motives when they don't implement the solutions, and instead stick to surge pricing.
To understand the first solution, one has to ask, "Why wouldn't there ever be enough drivers (outside of the Godzilla is attacking the city scenarios) ?" Pretend that there are 2 drivers in a city and 2 riders. At any given moment, both drivers should be available, and none, one or two riders may ask for a ride.
If no one needs a ride, the drivers sit idle. Who knows what they do? If one rider needs a ride, the call goes out and a driver answers. If both riders need a ride, "Oh noes! Surge pricing!"
huh? Why would one need to raise one's price an order of magnitude just because your fleet is getting used efficiently?
The company would respond, "Because the other driver wouldn't show up unless you raised their payout."
huh? Why? They signed on for whatever their wage is. Why would they need a higher payout to relieve their boredom? Are they in a movie theatre and need an incentive to leave? Is there an army of drivers who can leave their existing jobs but will only do so for surge rates? Who can leave their job beside already highly paid white collar workers?
"Because they could be across town and need the incentive to drive over."
This is possible, but this is a logistics problem. It's the company's job to put cars where they are need. If lots of people take cabs into the city, guess what? They'll need them to get out, so maybe just leave the cabs there? And if people are going in random directions, then there's no issue.
One shouldn't have to pay extra to get a cab to come to you. Whenever you rent a taxi, it's built into the price that you're going to take the cab to the end of the world and the driver has to drive back.
This problem dovetails into the second solution: reserving round trips. The most common reason for surge pricing is that people go out for the evening and need a ride home. NYE is the perfect example. People go out at random times but, when the ball drops, everyone wants to get home at the same time. When you arrive at a restaurant, there may be a few cars in line, but when you leave, there's a line of a dozen people trying to get their cars.
If the logistics of putting cabs where you need them is too hard, allow people to buy round trips. That is, they pay ahead of time for the ride back. In return, they should get standard pricing. If they don't use the ride, the company keeps the money, just like an airline would.
The reply might be, "But the company doesn't know when you will need the ride. They can't keep a driver waiting for you." That's a small problem in the big cities that these companies operate, because there will be a pool of people with the same request. Simply shifting more drivers to the area should alleviate the problem.
If the question is, "What if all those people want to leave at the same time?", the answer is, "Then send more cars." It can certainly happen that some people will have to wait for their driver to come across town. But it's not like taxi companies where you have no idea if there's a driver coming or not. You can see your driver on the map coming to you.
The bottom line is, these companies can't claim that there simultaneously isn't anyone to pick up and that there's too many to pick up.
If the claim is, "No driver will drive across town to pick up a standard rate fair.", I have to say that I'm a little skeptical but that there exists an incentive to get more drivers to do it without raising prices.
Put yourself in the driver's shoes. He (let's say) sees this fare across town and has to decide whether to take it. If he believes that he can get a closer fare, then there simply aren't enough drivers. Shame on the company for not scheduling them, and what's more is that surge pricing won't bring out more. If he believes that he can't get another fare, why wouldn't he take it? The extra gas? Hardly.
Additionally, these companies could create incentive plans to pick up rides. What they would do is, the more fares you pick up, the more get sent to you. If you don't pick up many, then other drivers learn of fares, and can grab them, before you do.
Instead of surge pricing, the companies can employ "surge credit". That is, when a driver picks up people during surges, they get extra credit. A company could give 2x to 4x credit for picking someone up during a surge. The amount should be high enough to more than cover the fact that the driver might be missing out on a local fare.
Ask any Domino's Pizza delivery person and they will tell you, if you don't show up to work on NYE, you don't have a job on the evening of the 1st. Having regular employment is an incentive in itself.
Conclusion
These ideas may or may not work. There is a bigger point, however. The bigger point is that these ride sharing companies are charging surge pricing, not because it solves a problem for them, but simply because they can. That is, they charge it because people will pay it and it raises their revenue.
I believe another company will come along, if it hasn't already, that employs ideas like these, gives people a guaranteed rate, and in so doing steals business from the surge price junkies. (Yes, taxi cabs already exist but many believe that they will raise their game to compete with the ride share app companies.)
