So when someone uses the app to find out about nearby rides, it shows no one, then it ups the rate to try and lure further drivers. Or the few drivers that are on the app currently. Then when the price is "right", all the waiting cars turn on the app at once to get the "surge" price.
These people are exploiting the rules of the system to violate the spirit of the system. The more available cars, the lower the price.
The more people find out that drivers are doing this, the more likely some form of retaliation will follow.
Either users will just start using cabs again because the price is no different or they'll do something else. Like give default bad reviews to any airport trip that they suspect of manipulating surge pricing.