Definition of Surge Pricing

What is the definition of the term "surge pricing"? What does the term "surge pricing" mean?

"Surge pricing" occurs when a company raises the price of its offering if there is an increase in demand.

For instance, Uber (a site that connects drivers with people needing a ride) raised some eyebrows when they announced that they would be implementing "surge pricing" on New Year's Eve.

Definition of Surge Pricing - Financial Dictionary - Stock MarketTheir strategy was simple - if available supply of drivers became dangerously low, the company would raise pricing. This strategy, they said, would help to increase supply, as it would encourage more drivers to work. Without surge pricing, Uber offered, supply would eventually run out and people wouldn't be able to hire a driver.

Uber also maintained that when demand started to ebb, prices would fall automatically.


This is "surge pricing" - raises prices when demand is strong and lowering prices when demand is weak.

-- Articles That Mention Surge Pricing:

"Uber" Losses: Ride Hailing Company Reportedly Lost Over $1 Billion in 1st Half of 2016