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  • Uber's experiment drove some customers to frustration
    dkshots, Creative commons (2012) ©

Uber: lessons from dynamic pricing

When Uber, a private New York taxi service trialled dynamic pricing, some customers were charged over $80 per mile, causing widespread anger.

Location United States--New York

'Dynamic pricing' means prices can quickly adapt to reflect changing levels of supply and demand. It is common among airlines, hotel chains and car rental firms and other businesses with fixed supply. And technological advances are opening up the model to new markets, from Broadway to baseball. However, when Uber, a private New York-based taxi service backed by Goldman Sachs implemented dynamic pricing on New Year’s Eve 2011, some unlucky punters were charged over $80 per mile, causing widespread consternation and anger.