Uber doesn’t get the difference between price gouging and disruptive technology

uber appAn article published this week at WSJ.com about the four-year-old taxi and limo disrupter Uber gets a few really important things wrong about emerging technologies, and why people adopt them.

The backstory: Uber has been upsetting some of its users by letting the cost of its car service “fluctuate with the market” during heavy usage periods. This is also known to you and me as price gouging. People hate price gouging. Uber’s CEO Travis Kalanick defends the practice in the article (and all over the Internet) by comparing his company to others in the service industry:

If you’re going and buying a hotel room, you know that prices can change. You know that if you don’t buy it now, the price could go down or it could go up. You know that if you buy a flight on the day before Christmas, it’s probably 10 times more expensive than two weeks after Christmas. You’re OK with that and you understand it.

Actually, people aren’t OK with those things at all; they just have no choice as consumers to do anything about it. The only reason it works? The airline and hotel industries act in collusion to uphold a pricing system that no consumer would ever choose.

This is where we look to tech startups to bring a little disrupt to the party, but some news sites  just want to pull Uber into the fray of decades (or century) old transportation systems. From CNN Money:

…nobody wants to pay $200 for a cab ride. But the wonderful thing about a free market is there’s always another option. You can still travel 25 miles from Yankee Stadium to Rockaway Beach for just $2.50 if you take the subway.

Clearly Uber shouldn’t worry about customer service because, hey, you can just take the subway instead! CNN’s writer seems to forget that the NYC subway is a public service. Imagine what a subway ride during a blizzard would cost if Uber or the taxi and limo industry ran it…

Desert Oasis

This is where disruptive technology is meant to come in to save the day, and why it can grow its user base so quickly, by upsetting the status quo in stale industries. Give users something better and they’ll flock to it, like thirsty crowds to water after many years spent wandering the desert.

Who would flock to more desert?

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Stephen Hammill

A digital communications specialist with several years experience in media, SEO, digital marketing and public relations, I’ve worked to create content utilizing new media while training others to do the same. Find me on Google+, Twitter and LinkedIn.
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Author: Stephen Hammill

A digital communications specialist with several years experience in media, SEO, digital marketing and public relations, I’ve worked to create content utilizing new media while training others to do the same. Find me on Google+, Twitter and LinkedIn.

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