This is interesting, could it potentially reduce surge pricing?
One thing I thought, it would be really convinient if Uber could amortize their surge pricing over the month/year. In order not to hit customers with unexpected rates and essentially offer a flat predictable fee over the whole period. Problem with that is you can't really plan the future demand to calculate how much you need to save/dip. Could an auction house help to hedge the bets?
It's unlikely to affect surge pricing. You can think of surge as a tool to move drivers to where the riders are. Even if you knew there would be heavy demand, you need to incentivize drivers to actually go there. Why would I, as a driver, go 20 minutes out of my way to be in Katy Perry concert traffic when I can keep picking up passengers at a reasonable clip on the other side of town?
Surge is only really solved once autonomous vehicles can be preemptively positioned near demand.
The author might be suggesting that you could have surge priced compensation for the drivers to incentivize them to move to the demand but also amortize that cost for the consumer.
That's an interesting problem because (if I'm understanding you correctly) forecasting would need to be done at an individual level. A consumer getting rides primarily during off-hours should (imo rightly) pay less than a rider booking rides primarily from busy locations. Amortizing that cost fairly while also making a safe profit is a tricky balance to strike, I'd think.
One thing I thought, it would be really convinient if Uber could amortize their surge pricing over the month/year. In order not to hit customers with unexpected rates and essentially offer a flat predictable fee over the whole period. Problem with that is you can't really plan the future demand to calculate how much you need to save/dip. Could an auction house help to hedge the bets?