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On a ride-hailing apps algorithm and surge pricing

December 2024
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I am sharing this very informative article on ride-hailing based on an investigation conducted by investigative journalists:

Ilagan, K. and Rainis, F.A. (December 10, 2024) “How we investigated the algorithm behind the Philippines’ largest ride-hailing app,” ijnet.org, https://ijnet.org/en/story/how-we-investigated-algorithm-behind-philippines-largest-ride-hailing-app?fbclid=IwZXh0bgNhZW0CMTEAAR2azviuNxdh5gSbrJKl8lsViL5YRO5k33QHFc24EAFkIi4HTo-Ew4H7LO4_aem_NnVHOD8B1PERNOQYSjVHdg [Last accessed: 12/27/2024]

To quote from the article:

“Once all the fares were broken down, we found that a surge fee was always present. With the help of statisticians from two local universities, we conducted a statistical analysis to scientifically determine whether the waiting time for a ride decreases when the surge fee is higher.

The results didn’t show a significant correlation between the surge rate and waiting times. This contradicts the assumption that a higher rate attracts more cars to the street and lowers waiting times.”

I leave it up to my readers to make their own assessment of what the conclusions to this report state or imply. The bottomline is that the ride-hailing company is making a lot of profit from their surge pricing scheme that really doesn’t make it easier for people to get a ride from their app.


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