Cookies help us display personalized product recommendations and ensure you have great shopping experience.

By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
SmartData CollectiveSmartData Collective
  • Analytics
    AnalyticsShow More
    image fx (60)
    Data Analytics Driving the Modern E-commerce Warehouse
    13 Min Read
    big data analytics in transporation
    Turning Data Into Decisions: How Analytics Improves Transportation Strategy
    3 Min Read
    sales and data analytics
    How Data Analytics Improves Lead Management and Sales Results
    9 Min Read
    data analytics and truck accident claims
    How Data Analytics Reduces Truck Accidents and Speeds Up Claims
    7 Min Read
    predictive analytics for interior designers
    Interior Designers Boost Profits with Predictive Analytics
    8 Min Read
  • Big Data
  • BI
  • Exclusive
  • IT
  • Marketing
  • Software
Search
© 2008-25 SmartData Collective. All Rights Reserved.
Reading: Business Analytics Error: Learn from Uber’s Mistake During the Sydney Terror Attack
Share
Notification
Font ResizerAa
SmartData CollectiveSmartData Collective
Font ResizerAa
Search
  • About
  • Help
  • Privacy
Follow US
© 2008-23 SmartData Collective. All Rights Reserved.
SmartData Collective > Data Management > Best Practices > Business Analytics Error: Learn from Uber’s Mistake During the Sydney Terror Attack
AnalyticsBest PracticesBusiness IntelligenceBusiness RulesCulture/LeadershipData MiningDecision ManagementMobilityPredictive AnalyticsRisk Management

Business Analytics Error: Learn from Uber’s Mistake During the Sydney Terror Attack

RK Paleru
RK Paleru
2 Min Read
SHARE

While the purpose of Business Analytics is to optimize outcomes, particular care should be taken in randomly applying analytical techniques while missing the very fundamentals of any business: “serving it’s customers.”

While the purpose of Business Analytics is to optimize outcomes, particular care should be taken in randomly applying analytical techniques while missing the very fundamentals of any business: “serving it’s customers.”

More Read

Image
For the Greater Good: Cops Embracing Google Glass
Stop Calling Social Analytics Intelligence
What Makes a Data Mining Skeptic?
RulesFest 2011 – Kenny Shi: Scalability in a Real-Time Decision Platform
Technology and the Effective Marketer

Recently, as a sad day of terror ended in Sydney, a bad case of Uber’s analytical approach to pricing came to light – an “algorithm based price surge.” Uber’s algorithm driven price surge started overcharging people fleeing the Central Business District (CBD) of Sydney following the terror attack.

While I am a strong proponent of analytic techniques such as pricing optimization (based on dynamic demand-supply), it is sad that Uber’s algorithm failed to recognize the rare event as an emergency and in the process the “human spirit [was] lost to algorithms” (albeit momentarily). While Uber claims its price surge algorithm did attract more drivers to a high traffic zone, my take is that the algorithm failed to interpret or differentiate the type of traffic pattern while the price increase kicked in. Basically, the algorithm treated the surge in traffic from people fleeing the CBD during the terror attack similar to how it would have treated a crowd leaving a stadium after a cricket match.

While Uber did offer free rides as compensation, the damage to its reputation was done. Such unintended consequences of analytical approaches can damage the very purpose and reputation of any business i.e. serving customers while building a brand.

In my opinion, there are three things to take away from Uber’s experience:

1. Pricing optimization is not always right.

2. Pricing algorithms should be smart enough to anticipate and tweak behaviors and outcomes under special circumstances.

3. No business (regardelss of its smarts) can build a brand against human spirit and compassion.

Share This Article
Facebook Pinterest LinkedIn
Share

Follow us on Facebook

Latest News

image fx (60)
How Finance & BI Teams Choose Accounting Software
Big Data Business Intelligence Exclusive
Why the AI Race Is Being Decided at the Dataset Level
Why the AI Race Is Being Decided at the Dataset Level
Artificial Intelligence Big Data Exclusive
image fx (60)
Data Analytics Driving the Modern E-commerce Warehouse
Analytics Big Data Exclusive
ai for building crypto banks
Building Your Own Crypto Bank with AI
Blockchain Exclusive

Stay Connected

1.2kFollowersLike
33.7kFollowersFollow
222FollowersPin

You Might also Like

Tiponomics: Analytics for Waiters

7 Min Read

Simple Tools for Building a Recommendation Engine

9 Min Read
AI and big data security applications
Artificial IntelligenceBig DataExclusiveSecurity

3 Spectacular Ways AI and Big Data Are Revolutionizing Cybersecurity

5 Min Read

A Cornucopia of Complicated Communications

3 Min Read

SmartData Collective is one of the largest & trusted community covering technical content about Big Data, BI, Cloud, Analytics, Artificial Intelligence, IoT & more.

giveaway chatbots
How To Get An Award Winning Giveaway Bot
Big Data Chatbots Exclusive
data-driven web design
5 Great Tips for Using Data Analytics for Website UX
Big Data

Quick Link

  • About
  • Contact
  • Privacy
Follow US
© 2008-25 SmartData Collective. All Rights Reserved.
Go to mobile version
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?