Last night, Uber charged 8 times its regular price for its car service. Controversy ensued.
The popular argument was that a brand, especially an emerging, sharing economy-based brand, could sour its customer base by a move that can easily be viewed as predatory. After all, sharing economy emerged to fill in a void created by the tight grip that predatory corporations hold on supply, which allows them to charge premium for access. Last night, some may say, Uber uncannily looked like a corporation it was created to overturn.
And yet. Think again. Last night, lovely snow storm gave way to slushy, wet streets filled with brawling Santas (yes, NYC had a priviledge to host yet another SantaCon). If you were an Uber driver, you were faced with the following situation: 1) damage your car by driving in snow/slush or 2) damage it by a puking Santa. Unsurprisingly, most Uber drivers hung their car keys and decided to stay at home.
Now Uber was in a tricky situation. How to provide supply that matches Saturday night demand? It found the solution in creating an incentive to drivers to go out. “Every man has his price,” the saying goes, and Uber discovered that that price is exactly 8 times the usual. Sure enough, there were more Uber cars on the roads, the reward overrun the risk, and Santas got home safely.
The question here isn’t one of corporate behavior, but of human psychology. And Uber got it right.
The image above is from the now notorious Santacon Brawl Video.