Collaborating with Grab: 5 taxi operators start to pilot dynamic pricing today

Lianhe Zaobao

According to Dr Jochen Krauss, pricing expert and Managing Partner at Simon-Kucher & Partners, a global pricing consultancy, believes that surge pricing is a good way to balance supply and demand through the ‘Invisible Hand’.

He mentioned that ultimately it trains the supply side to provide almost an exact amount of taxis that will be needed in a specific location, on a specific day, time or event. However, there might be a digital divide among drivers: the tech savvy drivers (who are now already are using multiple apps) and the less tech savvy. This will also affect the ability to hail a taxi on the street.

He also mentioned: “A fixed fare option reduces uncertainty for both drivers and passengers as they will see the exact amount before the ride starts. With this, drivers will be in a better position as compared to private hiring cars, as they become directly comparable. However, the ultimate decision still rests with the individual passenger.”