Download or read book Surge Pricing on a Service Platform Under Spatial Spillovers written by Kyungmin (Brad) Lee and published by . This book was released on 2018 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Ride-sharing platforms employ surge pricing to match anticipated capacity spillover with demand. We develop an optimization model to characterize the relationship between surge price and spillover. We test predicted relationships using a spatial panel model on a dataset from Uber's operation. Results reveal that Uber's pricing accounts for both capacity and price spillover. There is a debate in the management community on the efficacy of labor welfare mechanisms associated with shared capacity. We conduct counterfactual analysis to provide guidance in regards to the debate, for managing congestion, while accounting for consumer and labor welfare through this online platform.