I'm in San Francisco right now, a dense, large city with a huge tech-savvy population. There seems to be one other person online at the moment. I guess there are probably more online elsewhere in SF, just not within 1km of me.

Adapting the radius to match the number of people available seems like a great idea. If there's only one person within 1km, step up to 2km, 3km, etc. until some number X of people are available. If there are too many people, step back down.