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Summary:

If airlines can rise their prices 12 times at Christmas without a fuss, why can’t a car service? Uber’s CEO offered some new fodder for price policy debates

Travis Kalanik

Say what you want about Travis Kalanick, the guy sticks to his guns. On Christmas Eve, the Uber CEO used Twitter to taunt critics of the popular car service’s so-called surge pricing by pointing to Delta Airline prices:

The tweet’s Valleywag reference is a nod to a recent story in which the tech gossip blog excoriated Kalanick and Uber for jacking prices eightfold during a New York snow storm.

Kalanick’s latest Twitter salvo suggests he’s had no second thoughts about Uber’s pricing model, which he claims is a simple reflection of supply-and-demand, and helps ensure there’s an adequate supply of drivers at critical times.

Others are not so sure. The LA Times last week published a thoughtful piece casting basic market theory as espoused by Uber against real-world social and political aversion to price gouging.

And even Silicon Valley money men, who typically share a common libertarian worldview, are asking if Uber could shoot itself in the foot with the pricing policies.. Here’s a screenshot of a back-and-forth between Kalanick and investor Greg Bettinelli:

screenshot of Uber debate

It will be interesting to see how far Uber will test consumer loyalty during the upcoming holidays. In the meantime, Kalanick’s airline analogy provides more grist for economists and urban policy folk to debate the car service and its pricing policies.

  1. So Uber is aspiring to the brand loyalty on the airlines? Interesting choice for a model, Airlines are more known for having very price sensitive customers and having to give away perks to get loyalty.

    Also, the airlines discount prices for advance purchases to ensure certainty, which Uber doesn’t do.

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  2. Surge pricing is a joke and rip-off. I got charged $100 to go from manhattan to Brooklyn heights. When I asked the driver how come it was so expensive he told me it was raining? I have removed Uber from my apps. Someone told me that Coke looked at charging more for sodas in vending machines when the temp went over 90 degrees? They decided to pass on the idea. Time for Uber to drop surge pricing.

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  3. I suppose for a brand to break through these days you not only have to
    • Be shockingly different: Take Lady Gaga and Trader Joes
    • Poke the box: The title of Seth Godin’s recent book about initiative and making a difference is also what makes Trader Joe’s and Lady Gaga so special. Both don’t follow trends. They lead and have the guts to fail.
    I wonder if @uber and & @tavisk are taking ‘Surge’ pricing too far, alienating the customers who have advocated so passionately for Uber?
    Jeff
    @jf1216

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  4. I am so tired of this Surge argument! ( whining ) People argue for a better transportation alternative to the completely corrupt and price fixed Taxi Industry but are unwilling to pay for it! Look it’s real simple TAKE A CAB and good luck! On busy nights a cab driver is just as likely to ask for “more money or get out” I myself after being around the transportation industry for thirty years appreciate the chose (GET IT) 1.) I can hope for a cab and wait forever or 2.) pay more because the driver is being compensated for picking me up. Stop the whining Uber is not a taxi its a service for those of us that value “our time” as well!!

    RJL

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