- 50,000 Uber/Ola-style trip records analyzed using arc elasticity to find demand curves
- Found the 2.0x wall: up to 1.5x riders stay, 1.5-2.0x completion drops sharply, above 2.0x only desperate riders left
- Commercial areas most price-sensitive, transit hubs almost inelastic, residential in between
- Recommended zone-based surge caps and loyalty protection for Gold-tier users
Details
- The curve split into three zones: Up to 1.5x riders grumble but mostly stay. Between 1.5x and 2.0x completion falls off a cliff (the 2.0x wall). Above 2.0x completion flattens because only desperate or captive riders are left
- Commercial areas (offices, malls) are most price-sensitive since people have metro/buses. Transit hubs (airports, stations) are almost inelastic since people are stuck with luggage. Residential sits in between
- Weekday peak hour is the riskiest window to surge hard because commuters form habits and might switch to metro permanently. Rain barely moved cancellation rates at the same surge level - it's the price, not the weather
- Built recommendation: cap surge by zone and time instead of one blanket multiplier, and protect loyal (Gold-tier) users with a lower cap since they're the only segment where unit economics work