Uber Surge Pricing – How does it work?

Reading another post on Uber surge pricing, I reflected on when I was offered surge pricing on Uber. In both occasions, I had requested a car (plenty seemed available) and it timed out. On the third attempt, surge pricing was enforced. In both cases, there was plenty of available taxis and I chose that so oldschool 1.0 form of transport.

However, the other post had me think Surge pricing on Uber may not be entirely kosher.

Anyone else with that experience or able to lend some light into how it works?