Dialogue【Driving Demand】
I'm Rachel Wood and this is Tech Talk from New York City.
Today I am joined by Bob Evans, head of economic research at CiCi Taxi.
Welcome Bob!
Thank you Rachel. Very happy to be here.
Questions
What does he do at CiCi Taxi?
>he is the head of economic research.
Today I am joined by Bob Evans, head of economic research at CiCi Taxi.
Now Bob, since it was founded in 2011, CiCi Taxi has been very successful.
But your company has also upset some users with its surge pricing policy.
Can you explain to us what surge pricing is?
Surge pricing is when CiCi raises driver rates when many people need a ride at the same time.
Questions
When there is a demand for rides, the company will...
>increase the prices.
Your company has also upset some users with its surge pricing policy.
For example, if there has been a concert, the area will be very crowded afterwards.
And when all these people log onto the CiCi app and call for a ride, driver rates will go up.
This means users will need to pay more money than usual to get a ride.
Questions
How do uses call for a ride on CiCi?
>they use an app.
If there has been a concert, the area will be very crowded afterwards.
He is the head of economic research at CiCi Taxi
Your company has also upset some users with its surge pricing policy.
They use the company'a app to call for a ride.
Now why would CiCi do this?
The policy has been criticized for taking advantage of users.
It's been said that you are charging people more money when they need rides the most.
Well, I can understand why some people may feel that way.
But they need to think about surge pricing in terms of supply and demand.
Questions
What has CiCi's surge pricing policy has been criticized for?
>taking advantage of users.
It's been said that you are charging people more money when they need rides the most.
What do you mean?
In the case of CiCi, users are on the demand side, and drivers are on the supply side.
When there's heavy demand in an area, a greater supply of drivers will be needed there.
Raising driver rates encourages them to travel to that specific area.
It helps to balance supply with increased demand.
Questions
Who is the the demand side in the case of CiCi?
>users
By encouraging driviers to travel to crowded areas, the company...
>balances supply with demand
When there's heavy demand in an area, a greater supply of drivers will be needed there.
I can understand why some people may feel that way.
If there's heavy demand in an area, the supply of drivers needs to increase.
So surge pricing gives drivers a financial incentive.
If there's not enough supply to meet demand, users will be waiting longer for a ride.
Right. And when your supply is people, it's especially important to take care of them.
Otherwise, a competitor will eventually take away your supply source and slow your growth rate.
Questions
Why does surge pricing encourage drivers to head to the area with high demand?
>it gives them a financial incentive.
Otherwise, a competitor will eventually take away your supply source and slow your growth rate.
So are you saying that users should stop complaining and accept surge pricing?
No, but the perspective of our drivers should be considered.
This is the reality.
CiCi did not invent surge pricing. It's used in many industries.
It's basic economic principles, really.
Alright. Thank you Bob. Let's take a break. We'll be back in 2 minutes.
Questions
What does he want users to do?
>consider the drivers' point of view.
Surge pricing gives drivers a financial incentive.