The problem is not necessarily the principle, it's that surge pricing is opaque, governed by algorithms which attempt to maximise profit for Uber, not by simple supply and demand.

Surge pricing is not about profit for Uber. Uber wants to minimize surge pricing as it implies the market place is unbalanced. I.e. not enough drivers. Obviously with demand spikes you cannot magically produce more drivers so surge pricing does happen. But it is not a good user experience. In the ideal state drivers are busy all the time maximizing their earnings and riders can get a reliable ride.

Yeah, except that Uber and Lyft just keep most of the surge for themselves and obfuscate that fact from the riders and the drivers

You end up with a surly asshole driver and a surly asshole rider who both think the other is screwing them, when in fact it was the silicon valley douchebags

Well everyone except Uber wins, because I deleted it.

Did you end up getting a ride to the airport in time for your flight?

Surge pricing is a disgrace.

How do you propose dispensing a limited number of drivers to a larger number of customers? There are really only two solutions: get more drivers or get fewer customers.

Surge pricing can incentivize more drivers to come online. I don’t see how you can reduce the customers in a short timeframe.

Drivers don't materialize out of thin air in a short time period.

Surge pricing also reduces your number of customers in that moment.

True, there should be no need for automated system, but instead it should be auction for next available driver slot. So those who pay more get the ride faster.

I don't think I'm a fan of that either, but compared to the predatory approach now it'd still be a lot better.