Uber Explained: Boost vs Surge

What is a Boost versus a Surge?

A Boost is something that Uber puts out just for drivers. Riders don’t have any visibility into this. Really it is Uber paying drivers to increase supply in a particular area.

A Surge is when there are more riders requesting fares than drivers than can provide transportation. This drives up the cost for riders, though they are well aware of the surge.

Boosts

Why does Uber do a boost?

It is no secret that when the Uber app shows a surge, riders second guess if they want to use Uber. Perhaps they decide to walk, or bike, or ask a friend to drive them, or take public transit, or even worse, use a competitor (like Lyft).

With that in mind, there is no company on earth that wants to increase the number of times its customers are unhappy with them and looking for other options. Uber’s way to mitigate this is by trying to forecast the future for when demand will increase, incenting drivers to fill those areas so that the supply matches the demand (or often exceeds).

What does that mean for the driver?

Each day, drivers check their app to see what boosts are available. They click on the Earnings tab, then Promotions, then the boost(s) that fit the times they want to work. Each boost will specify how much ‘bonus’ Uber will pay if they work certain times in certain areas. For me, I try to do the 2x boost in Central Denver – first because that’s easy for me and second because I like to get twice as much money on each ride. Who wouldn’t right?

What does it mean for the rider?

From a rider’s perspective, they don’t know any thing other than when they request rides there are lots of drivers ready on call. The rider pays the exact same as they would any other time. Unless a driver discusses the boost information with them, a rider would know no different.

What does it mean for Uber?

We’ll take a real life experience. On Wednesday July 12th, I took a rider from Capital Hill in Denver to the Western suburb of Wheat Ridge during a 2x boost. The rider paid $19.45. I got paid $29.25 (of which $14.62 was a boost bonus care of Uber). Uber got $4.83 less what they paid me, leaving them with a loss of -$9.79 on the trip. In other words, Uber is committed to keeping the supply and demand in balance so they don’t lose riders to competition, investments they’re willing to pay me and other drivers likely losing thousands each time they do a boost (which is multiple times per day, every day). Which should tell you they have pretty solid margins normally to accommodate this.

Surges

Why does Uber do surges?

If they start to get a lot of requests that they don’t have enough drivers to fulfill, they have to try to rebalance the supply and demand. The way they do this is by raising the price of the rides to lower the demand bringing it closer to the number of drivers available. This is not something they like to do and they spend lots of money trying to avoid this.

What does it mean for drivers?

Each surge will tell the driver how much extra they’ll get paid if they take the request. In some cases it’s a 1.5x surge or 2x surge, etc. Drivers love this, we love extra money. Though as soon as Uber posts the surges, it updates in our driver app and we can see where in the city the surge exists. Drivers then converge upon those areas and within no time the surge disappears.

What happens if there’s both a boost and a surge?

The driver gets paid the larger of the two. So let’s say it’s a 1.5x surge for the rider and a 2x boost from Uber. The driver is going to be paid the 2x boost because that’s larger.

Let’s take the inverse, if the surge is 2x and the Uber boost is 1.5x, the driver will get paid the 2x because it’s larger. So no matter what Uber gives the driver the best option and we all win.

What does it mean for the rider?

They’ll pay more, whatever the surge amount is. Check out our other article on surges for more tips and tricks to working around these.

Hope this helps,
Sara

PS – if you’re interested in joining Uber, you can use my link to get a sign-on bonus: https://partners.uber.com/i/sarac13944ui

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