The New Frontier in Pricing Strategies

The digital economy has enabled a pricing model once considered theoretical—perfect price discrimination, where each customer is charged the maximum they’re willing to pay. While previously impractical, technology platforms now routinely implement this through smartphones, analyzing user data to optimize revenue.

How It Works

A recent Consumer Reports investigation in the U.S. found ride-hailing apps like Uber and Lyft charging customers significantly different prices for identical trips based on individual factors. This “surveillance pricing” isn’t limited to transportation—it’s expanding across sectors as companies leverage data analytics to identify price elasticity.

Implications for Emerging Markets

This dynamic is particularly transformative in Africa, where digital platforms are formalizing informal economies and reaching vast populations previously excluded from structured markets. In Nigeria and Kenya, ride-hailing apps use algorithms that determine both passenger fares and driver earnings based on real-time demand.

When fuel prices spiked in Nigeria recently, human taxi drivers would typically adjust base rates accordingly. However, automated pricing systems prioritize platform liquidity over macroeconomic stability, leaving drivers with reduced margins and limited control over their unit economics—prompting strikes by app-based transport workers.

Even basic commodities like data are subject to personalized pricing. In Kenya, Safaricom uses predictive analytics to offer “Just for You” packages based on individual usage patterns, doubling conversion rates while reducing customer complaints about hourly data bundles.