In case if Uber’s new pricing means it arrives into new market or reduction in the customer waiting time, so the price discrimination could increase society’s overall welfare. The Price discrimination may in many forms like the Coca-Cola’s infamous vending machine, selling the movie tickets on low price during working days, Pharmaceutical companies charge different prices in different countries and car dealer’s discount.
The only surprise that Uber hasn’t implemented such system likes this before and cleverly mimics a free functioning market along with the surge pricing. It charges different types of consumers different prices based on the service or for the same product. The main objective of the company is to utilize the “Willingness to pay” between consumers and thereby they get a chance to increase their profit. It describes the maximum amount a consumer could pay for a particular service or product, because the given consumers differ in income.