Why This Matters

Ridesharing marketplaces are living, breathing systems. Demand spikes (rain, concerts), supply wanders (drivers log off for dinner), and latency is unforgiving. Without a balancing mechanism, users see long pickup ETAs, drivers churn, and the system thrashes. Surge pricing is one (controversial but effective) lever to keep the machine stable.

The mental model: treat the marketplace like a feedback-controlled system. We measure congestion, we adjust price signals, we observe the response, and we do it again—every few seconds—without tipping the system into chaos.