Uber Pushing For Patent On Surge Pricing

mpicpp sends news that Uber is renewing its push for a patent on "surge pricing," the practice of increasing rider fees when many people are trying to find transportation. The system measures supply (Uber drivers) and demand (passengers hailing rides with smartphones), and prices fares accordingly. It’s one of at least 13 U.S. patent applications filed by Uber or its founders to give it an edge over potential rivals ahead of a potential initial public offering. So far, Uber hasn’t had any luck. Ten applications were initially rejected by the U.S. Patent and Trademark Office for “obviousness” or for covering something not eligible for protection.

Comments

not original

[bloodhawk]

Surge pricing I would have thought falls under the obvious category. It is simply pricing for supply and demand. higher prices bring in more suppliers and reduce the buyers. most businesses don't do it because it is difficult to manage and can cause a lot of customer aggro not because they are not aware of the supply and demand models.

Re:not original

[houstonbofh]

Ticket scalpers will sell you prior art for $100 over face value.

Re: not original

[bloodhawk]

hotels and airlines both adjust there prices constantly according to available supply and demand. There are many many other examples.

Re:not original

[SydShamino]

Toll roads already use surge pricing in some places, to keep the toll lanes uncongested during times of high demand. Uber's patent is so similar as to be obvious.

Re: not original

[bill_mcgonigle]

Price "gouging" is a good thing. It sends information signals to the market to divert goods to where they are needed. Hurricane approaching Florida? That load of plywood headed to Michigan should be diverted to boarding up windows in Dade County instead of to building a dog house in Lansing. But if the price of plywood is kept artificially low (only possible by the guns of government), there's no incentive to send the truck towards a hurricane, so the Michigan contract is fulfilled.
During Hurricane Sandy some friends and I looked at renting a truck and getting some generators from our local stores to NJ - about 300 miles. It would obviously have to be worth our effort but both we and the people without power who could not find generators would benefit. But then Chris Christie got on TV threatening anybody who would charge above big-box store non-emergency prices with National Guard action. "Screw that", we said, "they can sit in the dark and enjoy their fairness".
The important information theory piece to learn is that prices are the information signals that are sent through markets. The important economic piece to learn is that scarcity is real. The important political piece to learn is that politicians ignore both, to the detriment of their people but to their own personal gain.

Re: not original

[rtb61]

I hope one day you find yourself hanging from a cliff and just before the person reaches down to help you they say, agree to hand over all your assets or I will divert my resources to else where and assure you, that you can always wait for a more competitive offer. Perhaps a fire brigade that agrees to buy your house for 50% of it's value or they will not put out the fire. Price gouging practices inevitably leads to people creating disasters in order to exploit them. Creating monopolies are the same idea. So no, your ideas suck and they are grossly anti-social and have no place in a modern society.

Re:not original

[N1AK]

Actually it is normally called price gouging or profiteering http://en.wikipedia.org/wiki/P... [wikipedia.org] and is normally considered illegal in most modern democracies

No it isn't. Price gouging laws almost universally are limited to disasters and to critical items. Even if you consider taxis critical the vast majority of surge pricing on Uber is for things like sporting events, rush hours etc not hurricanes.

If you have 100 taxis, and 1,000 people want one then what is the correct way to decide who gets one if it isn't price? Chance, local knowledge, friends at the taxi firm... If surge pricing has the additional benefit of encouraging more drivers to enter the market at times of need then even better.

Re: not original

[rtb61]

That fire brigade idea is a historical fact, it occurred in Roman times. In fact that fire brigade was suspected of starting some of the fires. http://en.wikipedia.org/wiki/H... Now don't you feel foolish ;D.

Re: not original

[drinkypoo]

I hope one day you find yourself hanging from a cliff and just before the person reaches down to help you they say, agree to hand over all your assets or I will divert my resources to else where and assure you, that you can always wait for a more competitive offer.

We're talking about people who willfully build and rebuild homes that cannot take the stress of recurring natural disasters in a place where those disasters occur not merely occasionally, but regularly. And, I might add, in your example we have people who willfully build and rebuild flammable homes in areas known for their wildfires. That should be illegal and prohibited by code but instead it is enshrined in law.

Perhaps a fire brigade that agrees to buy your house for 50% of it's value or they will not put out the fire.

That is wildly different from the given scenario, and your bringing it up here is pure prevarication. In the given scenario, some people who would incur costs helping to solve a problem are not permitted to profit from solving the problem, eliminating the motivation to do so. In your scenario, some people who are already paid to solve the problem under our current model are demanding additional payment. Do you see the problem here? Proposing to reduce government interference in commerce is not the same as proposing to eliminate government services, and your suggestion that it is so is disingenuous. You know better. Stop lying.

The simple fact is that by not buying a generator ahead of time, these people have incurred additional costs. They know that they need one, but they are content to permit someone else to solve their problems for them. It's simply not appropriate to build your life around the use of electricity, live someplace where it goes out regularly, and not have a plan for solving that problem. Instead, people on the other side of the country wind up having to subsidize your lifestyle. Government interference in this area might reasonably require you to own your own backup power source (or subscribe to one on your block, perhaps, if our grid were capable of behaving like a grid — hint, it isn't) but it isn't reasonable to prevent people from coming in and offering to sell you a timely solution at whatever price the market will bear. That is rank hypocrisy, especially at a time of ongoing financial crisis. If you propose to prevent people from selling generators at inflated prices to people who need them right now, then what do you have to say about the general manipulation of energy prices? We all need energy all the time, and many people are barely able to pay their bills as it is. Your "modern society" includes the concept of charging whatever the market will bear for energy every day, it is unfair to people in bad situations every day. You're okay with that being nationalized, institutionalized, but not okay with it happening on an individual level.

You were given a concrete example of government interference in the name of fairness exacerbating a problem, and instead of conceding the point or at least considering it, you rejected it out of hand and brought up irrelevant examples to support your point. That is not thinking worthy of sharing.

Re: not original

[sinij]

No, price gouging is a failure of elasticity of demand. For the market to function properly, both parties to transaction must be rational and able to walk away from the deal. In most cases of gouging, one party has another 'over the barrel'. Such scenarios could not be properly described with market theory, but I theorize criminal law would be much more appropriate tool.

Re:not original

[Matheus]

*THIS* ^^^^

I've rarely experienced supply and demand so exquisitely demonstrated than when purchasing (or selling) concert tickets. Variable demand spikes depending on the quality of the merchandise (how 'big' is the band); Prices change constantly; inventory moves in and out of the market; Complex timeline price variations starting from pre-sale through on-sale and over the time between release and showtime (somewhat but not always predictable rises and falls over that time). It's a full time job keeping up with all of that on both sides making sure you get the most for the tickets you are selling and paying the least for the tickets you are buying.

I am a music junkie not a scalper but honestly if Ticketmaster/Live Nation were to profile its customer base I'd be in the suspect category just because I spend 250+ nights a year at some show or another and my friends are lazy/poor so my rate of ticket buying is exceptional for a casual user.

Surge pricing during security incident

[Harlequin80]

They could patent surge pricing during terrorist or hostage activities.

Uber managed to get some bad press here in Australia when their price went up to $100 for a callout to get out of Sydney when the guy took hostages in the Lindt Cafe there.

Re:Surge pricing during security incident

[Anonymous Coward]

Also known as price gouging
Illegal in most US states -- probably most other industrialized nations.

Wow, and they're trying to patent it? What a slimeball company.

Re:Surge pricing during security incident

[rockout]

I'm so tired of this bullshit example being trotted out as evidence of how evil Uber is. Here's the facts of what happened in Australia:

A bunch of people suddenly wanted Uber rides out of the area during the hostage situation. Uber's computers responded accordingly, and automatically, in activating the surge pricing. Whether you like the surge pricing or not, it's designed to get more drivers onto the road by providing the incentive of higher pay to meet the spiking demand. One would assume that at least some drivers are more likely to go out and pick up passengers when their phones alert them that they can suddenly make 4x the normal fare.

When human beings running Uber in Sydney became clued in as to what was happening, they made all rides in the area free.

Here's what DIDN'T happen: Uber in Sydney finds out about hostage crisis, says "omg let's charge 4x the normal fare because bunches of people are going to want rides and we can gouge them!"

You can disagree with Uber's business practices, or how they run their business, and that's fine, but when you just start making shit up, you lose all credibility and take away from an intelligent conversation on what to do about Uber. You're the problem.

Re:Surge pricing during security incident

[CanadianMacFan]

It isn't the first time this has happened to Uber. Maybe they should adjust their system so that if they see a sudden spike in requests it alerts the humans for instructions instead of just jacking up the price. They could put in scheduled events, like the end of a sporting event or concert, so that it wouldn't bother them.

Re:Surge pricing during security incident

[gnupun]

I'm okay with surge pricing as long as the reverse is also true. That is, when the demand is low, the fares should be below cost. So during periods of low demand, a typical govt regulated $10 taxi ride should cost $1-$2 on uber. This should be called slump pricing.

Re:Surge pricing during security incident

[rockout]

With regard to concerts and sporting events, why should Uber make rides free during those events? One would think Uber drivers would go to such areas at the conclusion of the event in hopes of picking up fares, so there would be less need for surge pricing, and if there were was need for surge pricing, that would still serve the purpose of getting more drivers on the roads.

Let's not forget a key point that everyone seems to ignore - NO ONE IS FORCING YOU TO TAKE UBER. It's merely an extra choice, meaning you now have more choices for transportation than you did before. That's a good thing. If you take a handful of negative news stories about Uber (many of them unjustified attempts by press to create a story out of nothing, like in Australia), and decide you don't want to use Uber, that's fine; you can still take a taxi, or a bus, or a train, or your own car.

Re:Surge pricing during security incident

[gnupun]

That would be stupid, and so your idea is stupid, because you're demanding that other people behave stupidly. You don't operate a private transportation concern below cost.

Okay, it's stupid because you say it's stupid. But it's okay for predatory, opportunistic vendors to fleece customers at a time they badly need a service. It's okay to charge 10 to 20 times what it costs them to provide said service, but start whining about some law of nature (it's not) called capitalism to justify their ripping off people.

I don't think it's stupid, in fact it is quite fair and efficient. During low demand periods, these services lie unused and that's a waste of resources. Lowering the price to below cost is counter balanced by the high prices during surge pricing -- therefore the taxi operators don't suffer any losses. This is just a variation of the freemium model which works quite well.

But you do charge what the market will bear, and in fact capitalism works better when you do that,

That would be fair if employees could apply the same principle to employers -- demand from them a salary they can bear. Instead, they are just paid living wages, plus some token amount for their education/experience. I find that capitalists usually just collect and combine works of their employees and deliver them to customers. But they pocket 70-90% of the product price for this simple service. I don't see how this is justified.

Uhhuh

[easyTree]

Ten applications were initially rejected by the U.S. Patent and Trademark Office for “obviousness”

It seems pretty suspiciuos that the USPO only now has started to do their jobs - just when UBER's patent-applications crossed their desks.

What a novel idea!

[Anonymous Coward]

Balancing supply and demand by raising prices? Who'd have thunk it?

Wait, wasn't there some guy named Adam Smith...

Its own prior art?

[gnasher719]

So when did they use "surge pricing" for the first time in public? Before or after the patent was filed? Performing it in public would be equivalent to a publication and stops it from being patentable.

Patenting Supply & Demand?

[BoRegardless]

Adam Smith disclosed that centuries ago.

Supply / Demand curve

[roman_mir]

So did Uber just rediscover supply / demand curve and the fact that increased demand with stagnant supply pushes prices up?

I mean that's like the FIRST law of supply and demand, if demand increases and supply stays the same clearing prices go up.

Well, let's see if the patent office knows anything at all about basic economics or if this will be accepted as an 'innovation because of ... computer or mobile phone'.

Surge pricing london style

[Anonymous Coward]

I used to use uber in London a lot even with surge pricing it was cheaper than a london taxi, and I could also get one. After a few months it became clear that some thing strange was happening with the surge pricing.

After working late one night I requested a cab, it looked like it was going to be there in about 10 minutes. It was really late and there wasnt much traffic, but car stayed at about 10 minute away for some time. I could see where it was so I started walking a way that would put me in front of it. There were some closed roads and I could move around quicker than a car through the inner city.

Eventually I am in the same street as the car, which is weird, because there is no traffic and no cars on the road, plenty parked though. My phone goes ding and the driver has canceled. I walk up to where the car was meant to be and find the car, parked on the side of the road. Swearing I pull out my phone and use uber, again surge pricing f#!k it I want to go home. I book, the car behind my driver pulls out and immediately picks me up.

The street I was in was quite near my work and its once I was familiar with, at 3am in the morning it wasn't normally full but this night it was. I wonder how long it took them to game the system?

Re:Surge pricing london style

[gnasher719]

Obviously I see a lot wrong with this. It pisses me off. It absolutely pisses me off. That's how you destroy a service. Just make people hate you.

Re:Econ 101?

[Virtucon]

Yeah, I think the Patent Lawyers win again, at least whoever wrote up the patent application and submitted it for them. Rule #2 of Econ 101, Lawyers always get paid.

kudos. Few Uber fanbois

[raymorris]

I very much expected that the vast majority of Slashdot commenters would take Uber's side, just because their marketing shtick is anti-establishment making them the darlings of the Slashdot crowd. I'm glad to see, and slightly impressed, to see that the Uber fans here are apparently capable of seeing when the Uber execs are being dicks.

At least ten patents so obvious they got kicked by USPTO already? If Uber is turning into a patent trolling company there might be some seriously conflicted people here on Slashdot.

Original implementations for obvious things are ok

[billstewart]

If you believe in a patent system at all (which is a separate argument), an original implementation for a relatively obvious concept can still be patentable. Most patents I've seen start out by claiming something fairly obvious (a wheel) and have several progressively less obvious claims before getting to the core invention (a specific axle mounting design, etc.) and then maybe some variations. Most articles about patent abuse focus on the more obvious claims being obvious; that's separate from whether the more abusive actual cases are somebody getting a patent for the less obvious parts and then suing people for violating the much more obvious claims.

Since Uber's lost about 10 previous attempts, they may very well be trying to patent something obvious (charging more when it's busy), or may be trying to patent more specific things about their implementation (but maybe still obvious to the patent examiners, who've actually taken taxis before, even if they haven't written compilers or optimized databases.)

Seriously?

[rnturn]

Some people might call what they're trying to patent price gouging.

And I'm so tired of this

[pem]

The "rounded corners" were not a utility patent -- it was a design patent, and only one element of it.

Yes, it was included in a design patent, but it shouldn't have been -- at least not in a way that allowed Apple to beat up Samsung over rounded corners. Rounded corners on a device you slip in your pocket are purely functional.

Re:And I'm so tired of this

[gnasher719]

Yes, it was included in a design patent, but it shouldn't have been -- at least not in a way that allowed Apple to beat up Samsung over rounded corners. Rounded corners on a device you slip in your pocket are purely functional.

Apple beat Samsung up about their phone that looked identical to the iPhone 3GS. Later Samsung phones had different rounded corners and looked altogether different, and guess what, Samsung has a design patent for its phones.

Your assertion that rounded corners are purely functional is self serving and only caused by your prejudices.

Re:Detect price gouging

[dryeo]

We should do this for everything. Buying food and standing in the line at the cashier, start an auction about who should be first, if someone is willing to pay $20 for a loaf of bread shouldn't they be first? Driving down the road and want to get somewhere fast, pay extra and be able to cut off other drivers. Bad accident, rather then triaging based on seriousness of injury, treat whoever can whip out the most cash or platinum credit card. If someone can't stay conscious then obviously they didn't want to be treated that bad.

Re:Detect price gouging

[kwbauer]

Why should you get to demand that someone gives you a service for less than they think the service is worth simply because you are poor?

Re:Original implementations for obvious things are

[Gr8Apes]

They're trying to patent something called yield management. I do believe a wikipedia article about an age old process invalidates any legalese patent language you try to wrap around the idea.

Still think Uber is kewl?

[Anonymous Coward]

Really Uber is pretty much the definition of what a 21st century robber baron looks like. Attempting to set loose the rawest most destructive and most craven form of labor-competition on the people least able to defend themselves in a race-to-the-bottom style of economics which in the end benefits only the principals of Uber.

Giving the finger to the processes and results of democratic law-making that define civilization, as opposed to rule by the powerful or rule by fiat. The laws regarding taxis and transit are not some form of special interest gerrymander lawmaking which benefits some mythical taxi behemouth mega-corporation. They are the hard-won rules of the game which protect people who are constrained to drive others to make their living. They protect the drivers and the customers.

It's amazing to me any nation has tolerated the sheer criminality and public endangerment that Uber's "business method" represents to their people.

And now we're all treated to the spectacle of Uber dragging its overheated crotch along the carpet, mewling for "protection from competition" to those same exact government's whose laws they take a sneering "squat-and-shit on you" attitude.

And worse, crying for absolutely the worst, most anti-competitive, most anti--progress, anti-free market type, anti-innovation form of market protection- business method and software patenting.

Uber is *about* nothing more than the sociopathy and greed of its founders and investors. Nothing more. Nothing.

prior art exists (tm)

[swschrad]

it's called gouging....