Uber Charges More If They Think You're Willing To Pay More

Forbes, March 2019

"As annoying as surge pricing may be to people, Uber knows that you are likely to pay the price at certain times. In fact, Uber even knows what your phone battery is currently and can determine if you are likely to pay or not.

"One of the strongest predictors of whether or not you are going to be sensitive to surgein other words, whether or not you are going to kind of say, oh, I'll give it a 10 to 15 minutes to see if surge goes awayis how much battery you have left on your cell phone,"Keith Chen, Uber's head of economic research said.

In other words, you're more likely to accept a surge-priced fare, regardless of the price, if your phone's about to die because you need a ride home immediately, and if your battery's death is imminent, you can't afford to wait 15 minutes to see if the price drops down again. Uber knows when its users' phone batteries are running low because the app switches into power-saving mode. "And we absolutely don't use that to kind of like push you a higher surge price, but it's an interesting kind of a psychological fact of human behavior," Chen said.

What they do-act upon to determine price is calledDynamic Pricing1. It works through Algorithmic Pricing, which determines what price to deliver based on different variables like your location, time of day, traffic patterns and even your user history with Uber. This data is collected, and the algorithm predicts the top price that you are most likely willing to pay. This "willingness to pay" algorithm can determine how likely you are to agree to the price of the ride at the current time. The results of the determining get incorporated into demand predictions by micro-segments and ultimately determines what price to set the ride at each time."

Is"dynamic pricing" another form of price discrimination? Are consumers and producers better off with dynamic pricing?Explain your reasoning

Dynamic pricing, also referred to as surge pricing, demand pricing, or time-based pricing is a pricing strategy in which businesses set flexible prices for products or services based on current market demands.