Uber Boss Says Surging Prices Rescue People From the Snow | Wired Business | Wired.com

Uber-accelerated real-time economics -- explaining $175/mile for an SUV ride in a NYC snowstorm

"To understand the economics of surge pricing from Uber’s point of view, think of drivers as supply and riders as demand. Especially in bad weather, demand goes up: Would-be passengers don’t want to be out in the snow and rain. Meanwhile, supply goes down: Drivers don’t want to be out in the snow and rain, either.
In that scenario, higher prices are meant to accomplish two things. First, by offering drivers more money, it gives them more incentive to get out on the streets — at least in theory — thereby increasing supply. Second, higher fares price out some riders, and demand goes down. Calibrating supply, demand, and price to get the most people the most rides for the least money is the math problem that Kalanick says Uber is always trying to solve."

Uber Boss Says Surging Prices Rescue People From the Snow | Wired Business | Wired.com