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Design a regional surge pricing strategy

OpenAIMachine Learning Engineer · Onsite
HardMachine Learning EngineerOnsiteSystem Design

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This question evaluates skills in designing real-time surge pricing systems, assessing competencies in machine learning modeling, control and pricing logic, data engineering, operational robustness, explainability, and monitoring within the System Design domain.

Scenario

You operate a ride-hailing platform. You need to design a system that sets surge multipliers (dynamic pricing) for a given region.

Task

Design:

  • A pricing strategy that balances rider experience, driver supply, and marketplace efficiency.
  • A production system that computes and applies surge in near real time.

Requirements

  • Update every 1–5 minutes.
  • Prevent extreme volatility (surge spikes/flapping).
  • Be robust to fraud and sudden demand shocks (events, weather).
  • Provide explainability and monitoring.

Deliverables

  • Modeling approach and control logic.
  • Data inputs and architecture.
  • Metrics and experimentation plan.
  • Safety constraints and edge cases.