Prisoner’s Dilemma Everywhere: Surge Pricing And The Uber Driver Strike

Uber Drivers tried to organize a strike to demand higher pay.

Uber drivers are competing with each for fares. The smaller the number of other drivers on the road, the greater the chance a driver get business. Also, when demand for rides outstrips supply of drivers, Uber might activate surge pricing to increase supply. Not only does a driver stand to get more business, he gets a higher fare/mile. The incentives to deviate from the strike are huge.

So, in Chicago, during the supposed strike, the number of Uber Drivers on the road was huge. Surge pricing was not activated because it was not necessary.

HT: An Uber driver.