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Uber Thoughts on Premium Pricing

by Carolyn Elefant on April 24, 2014 · 3 comments

in New Marketing Ideas

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Last night, I stayed late at the office. By D.C. standards anyway.  Meaning that when I departed at 1:30 in the morning, the metro trains that I use to commute to the office were no longer running so I had to find alternative transportation home. At that late hour, I wasn’t sure that I’d be able to find a cab – so I pulled out my smart phone, punched the Uber app button and was informed that a black sedan would arrive within four minutes.

Once out on the street, at least four cabs drove by in the 4-5 minutes that I waited for the Uber sedan. Tired and preoccupied with returning emails, I scarcely noticed or appreciated the interior. When the car pulled up to my house, I took out my phone to pay via the app but the driver informed me that my credit card had already been charged and that I’d receive a receipt within an hour. The receipt did indeed materialize – $50 for a trip that I’ve never been charged more than $30 by cab and sometimes, even as little as $20.00.  And with that, my earlier satisfaction with Uber dimmed.

But my experience also got me thinking about my law firm’s transactions. For example, when does it make sense to pay premium price for a marketing coach or a web developer or a Coach handbag that to me, doesn’t look all that different from the ones sold at Target or transport home? And on the flip side, when does it make sense to charge clients a premium price for service that they can procure at 20-30 percent less from another lawyer.

When first launched, Uber sold convenience – and with its easy-to-use app and payment system, it left DC’s grimy old yellow cabs in the dust. Of course now, DC cab drivers, having been unable to beat Uber through the regulatory process, have been forced to compete. These days, most DC cabs accept credit cards, have installed GPS and easy to view meters to track fare during the course of the trip.  In just a short time, Uber’s advantage on the convenience front — at least in DC — has diminished (same is true from my experience at TechShow in Chicago where a group of us grabbed one of the many cabs passing by after an Uber car failed to show up).

Of course, Uber doesn’t just sell convenience, but cool. Let’s face it, you simply look more “with it” and dignified when you hail an Uber car with the touch of a button instead of jumping up and down or whistling (or maybe even showing some leg as my friends and I did back in the day) to hail a taxi. Still, is cool really worth paying twice the price? Not in my family, where there’s a proud tradition of nerd-dom passed down through generations that I now inflict on my own daughters.

Still, I’m curious. When you pay a premium for a service, what are you buying? Convenience and better quality? Reputation of the provider? A chance to prove that you have the cash to pay the extra price? And when you charge premium prices to clients, what are you providing that justifies the extra fees? I’m uber-interested in what you have to say.

  • http://www.swordandthescript.com/ Frank Strong

    Gosh Uber saved us from a downpour at the ABA Techshow. No cabs to be found and Uber was there in about 45 seconds. Blew me away!

  • Josh brown

    great post! When I pay premium, I am usually paying for convenience, the experience, reputation and the quality (if it is food or clothes). But when you pay $50 for something you were used to paying $30 or perhaps you recently paid $30 for, and the only difference was the time of day…..that is a tough pill to swallow. This is an issue many are having with Uber

  • Megan Hunt Dell

    I tend to apply the theory that you can two qualities at any one time: cheap, fast, or right, but you usually can’t get all three. I pay a premium when I need something done fast and right.

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