Tech Companies and Surge Pricing

Source: Machine, Platform, Crowd: Harnessing Our Digital Future Published: June 2017

Source: Machine, Platform, Crowd: Harnessing Our Digital Future
Published: June 2017

Tech Companies & Surging Prices

Circulated: August 27, 2019

Situation #1 — December 2014

During a terrorist attack in Sydney, those fleeing caused Uber’s surge pricing to spike. The company faced intense criticism that this was wildly inappropriate.

Uber’s statement: “We didn’t stop the surge pricing immediately, and this was the wrong decision.”

Situation #2 — November 2015

During terrorist stacks in Paris, Uber canceled surge pricing in the city within 30 minutes.

Uber’s statement: “As soon as we heard about the incident we immediately suspended dynamic pricing all around the area of the attacks… and then across central London.”

Situation #3 — September 2017

During preparations for Hurricane Irma in Florida, Amazon removed excessively priced bottled water.

Amazon’s statement: “To protect customers, we’ve removed several offers from third-party sellers that exceeded the recent average sales price.”

Examples like these show the wisdom of having human judgment and algorithms working together.