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Why Didn't Sidecar's Flex Pricing Work?
I live in Seattle, and nobody I know here has significantly changed the way they think about getting around in the city, as a result of Uber or Lyft. Of course it's more convenient to open an app on your phone and press a button to summon a driver, than to call a taxi company and wait on hold until an operator picks up. And it's reassuring to see a little dot moving across a map on your phone screen showing you how far away your Uber driver is, instead of staring out the window and wondering when your cab is going to arrive. But on price, UberX and Lyft are about the same price as a taxi or less (UberX being the cheaper version of Uber), and sometimes more during "surge pricing" periods. It sounds hip to drop a reference to "taking an Uber" instead of taking a cab, but when cost-conscious people need to get somewhere, they still drive themselves or take a bus, just like they always have.
So I was noodling about writing an article suggesting that a ride-sharing company should try to grab all the market share by implementing a "set-your-own-price" model, which would allow drivers to name their own price for how much they would charge to take a rider from A to B. I even had a specific company in mind: Sidecar, sensitively referred to as the "forgotten stepsister" of Uber and Lyft, should up-end the came and challenge the titans by undercutting them on price. My reasoning was simply that if I want to travel from my house to a location 30 minutes away, a cab might cost $30. But if anybody close by (with a reasonably modern car and safe driving record) can compete on price to take me on that trip, I could probably find someone willing to do it for $10. And with Sidebar not being able to compete with Uber and Lyft on funding or marketing, what have they got to lose by trying a game-changer?
So, beginning of an article sketched out in my head, only to find... that Sidecar has been doing this since February. And nobody noticed. Well, apart from some guy named "Richard Branson", but he hasn't been getting the word out. (All right, be honest: If I hadn't told you that this was an idea backed by Richard Branson, and went with the original article saying it was just my suggestion, would you already be composing comments in your head about what another half-baked Bennett Haselton idea this was?)
So why didn't it change everything? Why do none of my friends talk about "grabbing a Sidecar" to downtown or to the airport?
Well, trivially because there are fewer Sidecar drivers than Uber or Lyft drivers, but that just begs the question: Once a preferable (cheaper) option existed in the form of Sidecar, why didn't more users start trying it out, which in turn draws in more drivers to serve those greater numbers of users? This is the standard textbook economic prediction of what should happen. And while the real world doesn't always follow textbook economic predictions, it's a little surprising to see the reality this far off in this case. A competitor offered a service 50% cheaper than the leading brands, and nobody noticed.
Driver-set pricing has another advantage, which is to blunt criticism of "price-gouging" during periods of high demand. Economists have long puzzled over why Apple and Microsoft don't charge more for their new gadgets, since as long as people are lining up to buy out the stock, sellers could raise the price and still be assured of selling out completely. Various theories abound, including that the act of raising prices would create too much resentment that would cost the company more in the long run. This seems to be the case with Uber, which has long been the target of sarcastic jibes about its "surge pricing", and which was charging four times its standard rate to transport people out of Sydney during a hostage crisis, before the company reversed course after an outcry and offered free rides to passengers trying to leave the city.
Now, most economists would say that raising prices during periods of high demand is what suppliers should do, for various reasons. First, you're going to be providing the good/service to somebody, so by providing it to the people willing to pay the most, you are at least making an effort to provide the service to the person who needs the most. Second, the widely publicized high prices will draw more suppliers into the marketplace to meet the demand, which helps bring prices back down (the standard "surge pricing" notification in the Uber app tries to make this point: "Rates have increased to get more Ubers on the road"). That means even if you're an altruist who planned on burning all the money that you got from driving during "surge pricing", you're still doing more good for the world by charging the highest rate the market will bear. (If you're still feeling guilty about all that extra money, you can donate it to charity rather than "donating" it to your customers by offering them below-market fares.) But I've never heard of a company successfully fighting off charges of price-gouging, by making the economic argument that they were doing the right thing. Usually they just don't engage in a discussion at all, or they cave like Uber did.
But with driver-set pricing, companies could say that they have nothing to do with the sudden price hikes. That's your driver gouging you! And then the driver could justify it to the rider by explaining -- truthfully, in at least some cases -- that they were in the middle of doing something else, when they suddenly got the alert that they could make extra money by providing rides, and it was only because of the high price point that they could justify interrupting their work to come out and drive. By putting it in these personal terms, the drivers would essentially be imparting to their riders the aforementioned economic lesson, the one that no company has ever tried to explain to its customers when it's the company itself jacking up the price. (Although, I expect this would create a new running joke about ride-share drivers: during surge pricing, everybody claims that they stopped whatever else they were doing and came out to "help meet demand", even though some of those drivers must be liars who were already out on the road when the surge hit.)
But in most cases, driver-set pricing would be cheaper than the standard fare set by Uber or Lyft. So why didn't the cheaper option take off? Maybe Sidecar underestimated the disadvantage of only being rolled out in 10 cities -- because Uber and Lyft are deployed in far more markets, they also get name-dropped in vastly more news stories and pop culture references, so even Seattleites won't know what Sidecar is if they only hear about ride-sharing services on TV. Maybe people taking Uber and Lyft rides are consciously or subconsciously trying to be trendy, and there's no point in using the less popular alternative. (Hipsters, on the other hand, now there's a marketing opportunity -- "I'm using this really obscure ride-sharing app, you've probably never heard of it...")
But I think the simpler answer is that the free market is just not the meritocracy that people think it is, or that it's portrayed to be in textbook economic exercises (which would predict that Sidecar should have captured 100% of the market by now). People use what they've heard of, and if a critical mass of influencers happen to talk up a particular product or service at the same time, that gets the snowball rolling, so that still other users will be attracted to the product or service because of the large numbers already using it. Whether the product is objectively "the best" has little to do with the outcome. In a plausible parallel world, Sidecar could have captured more of the initial buzz purely by accident, and led the pack with its flex-pricing model, and now we'd all be talking about Richard Branson's brilliant move that "shook up the industry."
You still clicked though, didn't you? That's all it takes. And.. oh, damn, I did it too! We seriously have to stop if we ever hope to have a Bennett-free slashdot...
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Filter error: You can type more than that for your comment.
Perhaps this will be an interesting article.
Oh noooo! Fuck shit arse! It's Bennett fucking Haselton yet again!
Just link to goatse or tubgirl with Rick fucking Astley playing in the background, so that I know that you're just fucking with me, Slashdot.
Who?
I'm not proud of myself for knowing who people like Meghan Trainor and Ariana Grande are, but I guess I pay enough attention to what passes for culture these days to usually have a clue when names come up. And I have no idea who Bennett Haselton is. So much for celebrity endorsement.
Do not look into laser with remaining eye.
What does Bennett get out of this that makes it worth the immediate hate he gets for every thing he posts? I assume he is paid for his entries, but is it really enough to have this black eye on his resume for the rest of his life? I mean really, how awful would it be that every time a potential employer Google's your name they turn up a ton of results detailing just how much you are hated and how half backed everything you say is.
I don't get why he keeps posting.
I'm done with this website.
This used to be a Slashdot, news for nerds. Not Bennett's Blog.
Who the fuck is this guy, why should we fucking care ?
Goodbye and fuck you Dice.
The only good think about this Bennett Haselton post is that it gives us a break from the HughPickens.com posts.
This place is going down the shitter quick-like.
What? Like a repeat offender?
This company you've never heard of, probably failed because you never heard of it.
*slow clap*
Shut up, Bennett.
So, like a super-fan?
For those that don't know what I'm referring to, give Sharyn McCrumb's Bimbos of the Death Sun a read. It's a tongue-in-cheek murder-mystery set at a science fiction convention. The murder victim is essentially Harlan Ellison, if not in name.
Do not look into laser with remaining eye.
Except that drivers aren't making more money with Uber or Lyft.
Saturday night I took a Sidecar home, and our driver was talking about how Sidecar is currently offering better base rates (after accounting for deductions -- Uber shows drivers the price a customer is paying before their cut is taken out), and currently offering double payouts from their marketing budget as a limited-time promotion to attract more drivers.
The premise that Uber or Lyft pays better is, presently, false.
Dude, get a grip. The slashdot "audience" doesn't like Bennet's posts. Not just one person, or a few, but the *overwhelming* majority of commemorators..
Frankly, if you don't like these comments, don't read them, don't respond to them, take some of your own medicine and when you pull bennet's dick out of your ass you can go fuck yourself too.
Does Slashdot pay by the word?
Do not look into laser with remaining eye.
I would think that crappy front page editorials from a single individual would make long time readers Feel right at home
Why??? Hasn't he wasted enough of our time?
DON'T YOU DARE keeping him from posting!
Not that I would miss his drivel (actually, I never read a word), but the comment section is more fun to read than the cartoon page of any newspaper there is!
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Nobody has. Some of us are here for their daily two minutes hate, some are here to read the comments.
To be honest, I have no idea what the text on top is about, I just read Bennet and knew I had to hit the comment section!
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
More like an inverted Simon Cowell.
You watch American Idiot to hear how he berates and annihilates the idiots that dare to come on stage while having exactly zero discernible talent whatsoever.
You read the comment section of his postings to read how the commentators berate and annihilate him for daring to ... you get the idea.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Now you're being unfair. Slashdot just wants to be a news medium just like all the others.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Slashdot's editor team knows that the "audience" here hate Bennet Hasleton's continued long winded drivel, yet they keep posting his stuff regularly.
This yet another clear sign that Dice and Slashdot do not care about their "audience", continuing off from the Beta debacle.
Just keep ignoring your "audience" while expecting viewership to increase. Yeah, that will happen alright ...
2bits.com, Inc: Drupal, WordPress, and LAMP performance tuning.
Now that only drove up Bennett's click count. I guess commenting only drives up his comment count, too.
Oops.
But I just can't help myself. I have to click so that I can comment, and I have to comment so that I can bitch about what a shitty writer Bennett is.
One day I'll have to write a greasemonkey script to filter Bennett Haselton out.
They don't grade fathers, but if your daughter's a stripper, you fucked up. --Chris Rock
The difference is that Katz posts were entertaining. Perhaps entertaining in entirely an unintended way, but they possessed a level of surrealism which felt like high art. It's like if The Jerk were to take up editorialism, I think that's how his stuff always read.
These posts are just dumb.
i also show up for the venom.
Can we stick to "News for nerds", please?
There's no -1 for "I don't get it."
I thought it didn't work because he's a tedious, ill-informed windbag.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Taking a moment out of my busy day to help the community--
Bennet you're a stain left over from a douching session during a yeast infection. Pleasant, eh?
Won't read. Would make offensive comment again.
Captcha: kindest.
That and no one asked Bennett how to fix the problem incorrectly! http://petitions.moveon.org/si...
It's comments like the above that make me think Slashdot has become some college frat's drinking game.
Looks like he's editing his own wikipedia article. Why is this guy noteworthy enough to have a wikipedia article?
Help! I'm a slashdot refugee.
I still visit /. occasionally. The last two times, it was to find a Bennett Haselton article. Just to add fuel to the fire: have you read Bennett's Wikipedia page? I do believe he wrote it his very own self.
I think I'm going to stick to Soylent in the future...bye bye again, /., it wasn't nice coming back...
Enjoy life! This is not a dress rehearsal.
Drole? what is that supposed to mean? It is not even a word. If you're going to set up a petition, please have the decency to be able to write something that makes sense. If you mean 'droll' you have managed to misspell the wrong word. Bah.
http://www.acetonestudio.com
I'm (in a more civil way) with the GP: the distaste for Bennett and the vitriol in the comments feels like people driving across town to picket a porn store, when they could just stay home and not buy porn.
But your post -- "I usually don't notice it is a Bennett piece until I am halfway through reading it and say "Oh man, this is terrible"" -- makes me realize a lot of people read Slashdot differently than I do. I see Bennett's name before anything else, like this big BLINK hashtag, and know what I'm going into when I choose to click on that 'read more' link.
I'd love moderation on articles, but in the same way that groupthink buries unpopular comments with no basis on their actual merit, we might lose some good material.
I'm not saying Bennett's articles are chock-full of merit. He definitely has a higher word-to-concept ratio than I'd use. But I can't help feeling like at least some of the hatred for his stuff is because those of us who are both socially aware individuals and geeks cringe when we hear someone monopolizing a conversation by holding forth on his/her own pet subject of interest.
Maybe Bennett should set up an amazon turk survey for figuring out just how much text on a given subject is too much, and how much is just right.
But in the meantime, the internet is a dynamic array and I'd much prefer someone spend his time vastly expanding one small chunk of it, behind a link, than a lot of other things he could be doing.
Nostalgia's not what it used to be.
I clicked on "read more" to see if any of the 100+ comments were something besides complaining about Bennet. :-P
Slow down, cowboy! It has been 4 hours since you last posted. You must wait another few hours.
I started reading this and assumed it was a poorly written satire of the 'article' - NO! it is the article. Nice troll douchebag!
http://www.acetonestudio.com
give Sharyn McCrumb's Bimbos of the Death Sun a read.
Didn't it win an Edgar? Yep, Best Paperback Original. Original edition published by TSR...when there still was a TSR.
Heh, I lol'd .
But anyway, to go off on a tangent, where was the /. coverage of the Car2Go outage from Friday? The one caused by the meltdown of their "German-based" mobile carrier due to some network roaming bug? I assume they're trying to deflect the blame to T-mobile without directly impacting their stock price...
http://www.thetruthaboutcars.c...
you waste of fucking space
Political debates have me rolling my eyes so much I think I got optical whiplash. I should sue. - Foamy The Squirrel