Surge Pricing: Initial Lessons From The New Sharing Economy
Publication: Wired Insights
In recent months, there has been much debate around Uber’s “surge pricing” model, which algorithmically increases the cost to hire one of its Uber drivers during times of high demand. The New York Times asked if the method might be “an example of high-tech gouging”, while ValleyWag’s Sam Biddle accused the company of hitting “customers with the worst price gouging we’ve ever seen”.
Uber CEO Travis Kalanick has been a staunch defender of the policy ever since the controversy started and last month Uber investor and board member Bill Gurley provided a deeper look at the company’s pricing model. A key phrase was repeatedly used in this explanation: “independent agents”.
If you think that — simply because of the raucous on social media and in the blogosphere — Uber is throwing its customers under the bus, you might not see that Uber is simply responding to the other half of its customer base. While Uber is (full disclosure) a Sparkcentral customer, this is part of a much bigger trend around the rapidly evolving and expanding “Sharing Economy”.
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