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 Ubers operation. Results reveal that Ubers pricing accounts for both capacity and price
spillover. There is a debate in the management community on the ecacy 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.First author draf