As people rush to get that perfect Christmas gift for their family and friends, or head home for Christmas celebrations, getting a ride is usually a top priority. Finding a reliable and safe form of transport is of the essence.
Amid all the chaos and frenzy, many people who take ride-sharing services such as Uber often wonder why fares vary, especially during those critical times. To get a better picture, Uber allows us to decode the myth that is Dynamic Pricing. Is there really anything good that can be derived from such a pricing scheme? Or is it all for making a fast buck on folks who just want to desperately get home for Christmas?
First of all, what is Dynamic Pricing?
Without getting too technical, Dynamic Pricing basically involves fare charges that aren’t fixed. Uber fares, for instance, depend on things like supply and demand. Rush hour, for example, is one time when a lot of people tend to book an Uber. The ride-sharing system’s algorithms detect this and tend to set prices a tad higher—especially if driver supply tends to be lower than demand.
While this may seem quite unfair (especially when you’re at the receiving end of the deal), there can actually be an upside. Since prices aren’t fixed, charges can be lowered once supply settles. If there are more drivers out there, for example, prices can indeed be lessened. This, in turn, allows more people from a wider coverage area to use services like Uber Black, UberX, UberHOP, and UberCOMMUTE.
Once this happens, Uber can come one step closer to meeting its goal of providing decent and reliable transportation for more people. It can likewise help #SolveTraffic by lessening the number of cars on the road. All thanks to things like Dynamic Pricing.
