Why do cab service providers like Ola, Uber, etc. hike prices when it rains?

As a regular cab user, I always find it difficult to get an Ola or Uber when it rains. Even the prices will be soaring high. 

What you call the Surge Price is the Dynamic Price or Demand Price. This is the time-based flexible pricing strategy of the cab providers, based on the current demand for cabs. When there is excessive demand for cabs, Ola and Uber cash the opportunity by increasing the price of the cabs. Usually, this Surge price varies from twice to even to 6 – 7 times higher than the actual price. Ola and Uber are private cab providers and work on the Supply and Demand principle.

Previously, Ola and Uber used to notify the Surge price like this.

Answer Image

But now, you get the Peak price directly, and if you agree and confirm, you can book the cab. We do not know how many times of the original price we are charged. The logic of the cab providers is “We are meeting your demand and trying to sort out the demand-supply mismatch by dynamically changing the prices”.


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