Uber uses a pricing strategy based on real-time market conditions. It charges less in periods of low demand and more during periods of high demand. Sometimes these prices double or triple during periods of high demand. Uber argues that these higher prices motivate more drivers to pick up passengers, thus increasing the supply of drivers needed to handle the additional demand. This demand-based pricing strategy is an example of
A) special-event pricing.
B) penetration pricing.
C) dynamic pricing.
D) prestige pricing.
E) reference pricing.

Question

Quizplus · Accepted Answer

The pricing strategy used by Uber is dynamic pricing, which is based on real-time market conditions and adjusts pricing according to supply and demand dynamics. This pricing strategy allows Uber to balance supply and demand effectively and efficiently, leading to a better user experience for riders and drivers.

Uber Uses a Pricing Strategy Based on Real-Time Market Conditions