Re:Uber proposes policy that would pay drivers a minimum wag...
by ghaff on Thursday August 29, 2019 @01:55PM
(#20831952)
>If they were certain their customers were not price sensitive, Uber would have already spiked their pricing far higher to push toward profitability.
Many/most Uber customers would use a materially cheaper equivalent service if available because the switching costs are low.
However, that's not the same as price elasticity (of demand) which is what the term usually refers to. Price elasticity is about how much less they'd use any price-competitive service as the price increases.
I'm honestly not sure what that curve looks like. Within reason, pricing wouldn't affect my usage much at all. But I'm a light user of these services and use them almost entirely for business. Certainly I'm a very different profile from a young urban professional who doesn't own a car.
ADDED: Between surge pricing and other pricing experiments I'm sure they conduct, I would imagine that Uber has a pretty good idea of what demand and driver supply curves look like.
Many/most Uber customers would use a materially cheaper equivalent service if available because the switching costs are low.
However, that's not the same as price elasticity (of demand) which is what the term usually refers to. Price elasticity is about how much less they'd use any price-competitive service as the price increases.
I'm honestly not sure what that curve looks like. Within reason, pricing wouldn't affect my usage much at all. But I'm a light user of these services and use them almost entirely for business. Certainly I'm a very different profile from a young urban professional who doesn't own a car.
ADDED: Between surge pricing and other pricing experiments I'm sure they conduct, I would imagine that Uber has a pretty good idea of what demand and driver supply curves look like.