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Is your friend getting a cheaper Uber fare than you are? | The Guardian

We all know that ride-share companies like Uber and Lyft operate dynamic, or “surge”, pricing: they change their prices in real time, according to supply and demand. But is there something else behind these fluctuations in fees? Is your taxi fare actually being personalized according to how much the company thinks you are willing to pay?

I’ve long had the hunch that this might be the case. Partly because I’ve occasionally noticed that I’m being quoted a different price than a friend who happens to call an Uber to the same place at the same time. Other people have had similar observations.

They’ve noticed that they get sent 50% off Uber discounts every week, for example, while other people don’t. And one of my friends, Dan, says that when he switches from his personal credit card to his corporate credit card in the Uber app, his quoted price often decreases. “It might have something to do with my kid vomiting in some cabs,” he hypothesizes. There may well be an algorithm that has figured out that dad-Dan is not as desirable a passenger as corporate-Dan, and charges him accordingly.

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Of course, anecdata doesn’t prove anything and can easily be explained away. Two people getting quoted different prices for the same Uber ride might be due to the fact that Uber’s dynamic pricing algorithm is very sensitive and changes every split-second. However, I find it hard to believe that the likes of Uber and Lyft haven’t experimented with personalizing their prices by analyzing your personal data and figuring out how price-sensitive you are.

Personalized pricing, which is also known as price discrimination or price optimization, depending on whether you’re an economist or an online marketer, is a growing trend. According to a recent Deloitte and Salesforce report, 40% of brands that currently use AI to personalize the customer experience have used it to tailor pricing and promotions in real time.

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Is your friend getting a cheaper Uber fare than you are? | Arwa Mahdawi | Opinion | The Guardian.

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