In this scenario its incredibly important to monitor price discrimination and ensure it doesnt turn into other forms of discrimination.Its hard to believe the likes of Uber and Lyft havent experimented with personalizing prices by analyzing your data and figuring out how price-sensitive you are.But is there something else behind these fluctuations in fees Is your taxi fare actually being personalized according to how much the company thinks you are willing to pay.Partly because Ive occasionally noticed that Im being quoted a different price than a friend who happens to call an Uber to the same place at the same time.
And one of my friends, Dan, says that when he switches from his personal credit card to his corporate credit card in the Uber app, his quoted price often decreases. It might have something to do with my kid vomiting in some cabs, he hypothesizes. There may well be an algorithm that has figured out that dad-Dan is not as desirable a passenger as corporate-Dan, and charges him accordingly. ![]() However, I find it hard to believe that the likes of Uber and Lyft havent experimented with personalizing their prices by analyzing your personal data and figuring out how price-sensitive you are. According to a recent Deloitte and Salesforce report, 40 of brands that currently use AI to personalize the customer experience have used it to tailor pricing and promotions in real time. ![]() Information about personalized pricing practices typically only comes out when theres a leak, when someone from the inside divulges it. It seems unfair. However, despite all the secrecy there have been a number of well-documented instances of personalized pricing in action. If they lived near a Staples competitor they would get a cheaper price than someone who had no other options near them. In an interview with Bloomberg, the company acknowledged that it had a new fare system called route-based pricing. This means it calculates peoples propensity to pay more to travel a certain route at a certain time of day, and charge more for that route. Traveling between a fancy neighborhood and a city center during peak commuting hours, for example, might cost a premium rate, because the company expects people will pay for it. Youre discriminating against people who fall into certain groups. When I asked Uber if they practiced personalized pricing, referencing this example, they flatly denied it. This carefully worded answer was, at least, better than Lyft, who didnt respond to multiple requests for comment. In 2016, for example, a behavioral scientist at Uber divulged that the company knew that people were more willing to pay a higher fare when their phone batteries were low. While they said they absolutely dont use that information, one has to wonder why they have a behavioural economist on staff in the first place, if it isnt to manipulate prices based on peoples behavior. But, really, we have no idea how much information the likes of Uber know about us and how they are using this data; their privacy policies are incredibly broad. Not least because the rise of ride-sharing companies is having a negative impact on public transit and deepening inequality. Uber et al are increasingly being used as an alternative to public transit by higher-income people, meaning these systems lose money.
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