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Not All Uber Drivers Like Surge Pricing, Either
CNET reports that Uber's practice of surge pricing, which sometimes raises the ire of passengers, isn't universally acclaimed by the company's drivers, either. "[M]ost Uber riders," according the the linked article, "despise surge pricing," though it's not clear quite how that "most" is arrived at. From the piece: They've complained about running up bills totaling hundreds of dollars, and have criticized the company for using surge pricing during emergencies, like Hurricane Sandy and the Sydney hostage crisis. The San Francisco Better Business Bureau gave Uber the grade of an F because of complaints related to surge pricing. And New York lawmakers have even proposed legislation to put limits on how high fares can go. Now some drivers, like [San Francisco Uber driver Peter] Ashlock, are also having second thoughts on surge pricing."
On the other hand, what system would you propose to better reward drivers for working at high-demand times?
If only there were a way to regulate their pricing to make it consistent, say a commission of hired cars and drivers.
But, nah, that'll never happen.
...
(I hope the sarcasm is obvious...)
Ezekiel 23:20
If uber is too expensive, just call a taxi?
at some point you have to stop applying market adaptation. no one wants to submit
a sealed bid to buy a banana or a bar of soap.
if i'm going to rely on Uber to get to work, and a lot of people here do, then not
having it cost $50 some random day has value in and of itself.
And maybe I don't want to support a business which relies on zero margins to attract
customers and remain competitive, but then really applies the screws when it
happens that i don't have any other choice.
I don't get the hate for surge pricing; it feels, to me, like a cry for education.
For example, an Uber where I live costs around half or less that of a regulated taxi. *Some* of my friends complain like crazy when the surge modifier is like 140% - not realising that it's STILL cheaper to have Uber around than use the old system. Then they suggest a "remedy" for surge pricing, that is basically moving back to something closely resembling the old system. Essentially, their proposals would result in a "constant 100% surge pricing" just to have predictable prices.
Surge pricing achieves two things:
1] Encourages drivers to work peak times in peak areas, increasing service.
2] Prices a scarce resource accordingly, meaning that people can choose an alternative (wait, don't go, use a different transport system) appropriately instead of just having a fucking LOTTERY of who gets the only cab available.
Surge pricing is good for everyone, and just about everyone I have ever explained it to has gone "Oh yeah I see what you mean". We just need to educate people.
That said, I am curious to hear of any legitimate arguments against surge pricing - anyone got any?
The outrage over surge pricing during that crisis was ridiculous. You are asking drivers to head towards a dangerous situation you are actively trying to get away from, but are shocked to find you have to pay more for that?
*Oh boy! Santorum on my back seat! I'm in the money!*
This complaint just doesn't make any sense. We are moving to this pricing model all over the place, even in traffic control situations. Tolls on bridges and tunnels and express lanes are often "surge priced" these days. The express lanes into Miami on I-95 are only a quarter most of the time. But during rush hour and other heavy traffic times the lanes bump up towards $10.
And those are fixed resources - so there is no way to get more cars through the tunnel or over the bridge. With Uber the raised prices will theoretically get extra drivers on the street - limiting the surge in prices and getting service to more people.
And as others have mentioned - if you don't like the policy, you have alternatives.
Uber should just raise the % the driver gets during these peak times, it's stupid they don't already do that because everyone wins.
Customer: has good experience with über when they may not have used it before.
Driver: incentive to work during emergency / high demand time.
Uber: increases the likelihood of attracting new / more regular users by acting like a Good Samaritan not a corporate greed machine.
"On the other hand, what system would you propose to better reward drivers for working at high-demand times?"
If we want to stick with Uber's claims about simply being an app that enables a market, there's an easy solution. But first we have to be honest about one of Uber's core claims: Uber is not engaging in any form of free market capitalism. Uber sets the rates consumers pay and drivers receive. Their is no market driven supply and demand in Uber's model. Sure, they can say "but... algorithms" and confuse people into thinking this is a pure form of free market capitalism. In reality, it's just an authoritarian scheme controlled by a few people at the top. Hell, they use their massive VC warchest to rewrite regulations in their favor - you know, manipulate the market.
For Uber to really to do market driven ride-sharing, they would simply provide a bid/ask platform for riders and drivers. Riders could post what they're currently willing to pay per mile/minute/what-ever-metric-makes-sense, drivers could post what they're currently willing to work for. Transparency on both sides as to price and other factors (e.g., location, number in party, etc) would allow each to adjust their rates according to current market conditions. That's how a free market for ride-sharing would actually work and provide a natural (invisible?) method to reward/incentivize drivers during surge times.
-Chris
Either regulate UBER just like you would the competing service, in this case a Taxi service, or DON'T regulate the taxi service and let them openly compete with UBER. It seems foolish to have 2 standards. After having ridden in a cabs frequently, on a regular schedule I worked out a deal with the drivers myself and was never disappointed, as I headed out the door at 06:30 every morning to find one waiting at the end of my drive way.
errr....umm...*whooosh* *whoosh* Is this thing on ?
what system would you propose to better reward drivers
Time and a half for the drivers, with no increase share to Uber itself during times of emergency or extreme demand (it is easy to justify an incentive to get the drivers to work during the crisis, Uber should be working anyway.). Any more would be (and is) gouging.
I'm an American. I love this country and the freedoms that we used to have.
I'm not the bad guy here!
I wouldn't "better reward drivers for working at high-demand times". Taxi drivers don't do this. Why should Uber?
I don't see any comments yet which were written by people familiar with the taxi business. Drivers make their best incomes from surge times because they are not sitting around or driving around waiting for a fare. They don't need an additional incentive. Surge pricing mostly makes more money for Uber.
Extreme surge pricing just means the cabs are reserved for upper income people, which some of you find perfectly acceptable. I don't, especially in an emergency.
There are two reasons to raise prices during a surge:
1) There are not enough drivers and we all want to encourage more drivers to get out of bed and drive. In this case 100 percent of the addition money goes to the drivers, Uber gets none of the increase.
2) Uber is profiteering/gouging. There are plenty of drivers, but Uber raises rates and keeps all the addition money.
I cannot imagine anybody objecting to #1, it solves a profound scarcity problem in an elegant way for tiny amounts of money, plus consumers can simply take other modes of transport (trains, taxis, rent a car) if the price is too high. Everybody is against #2 and it might even be illegal. So Uber should make the numbers and reasons completely transparent and all complaints will go away.
Uber sets a max price. Drivers are allowed to tell the app that they're willing to take a smaller sum, and Uber will dispatch the lowest-priced car in the area to the user if they're within some time window where it won't make the wait excessive. The higher price incentivizes the drivers, but they're allowed to compete on the price if they want, which will serve to hold it down.
Let the drivers set their price, then let the riders bid. IE make it an ACTUAL market. If someone wants to get out and drive during an emergency (or early morning, or on a holiday, or whenever), let him set his price as he likes. Riders see the price and how far away the driver is, and choose based on their situation. If they really, REALLY don't want to wait, then they can bid $30/mile if they want, ensuring that they get the closest driver (and they will pay whatever his rate is, up to $30/mile). If the rider is in no hurry, then they can put in a lower bid and wait for someone to get to them.
The problem here is the fact that the current price scheme is mostly arbitrary.
Surge Pricing is a fancy way to say price gouging. Not more nothing less. Its not economics is just plan fucking greed.
If you "work" at a time of low demand, then you don't really work.
If you work at a time of high demand, then you'll get lots of business.
Surge pricing is a good idea; the problem seems like the amount is too much.
So during a surge.... instead, warn would-be passengers about high demand and offer them the chance to place an additional payment to "bid" for the next ride as a prepaid fixed dollar kickback, not an increase in fare or not additional $$ per mile travelled, but a payment for increase in priority ---- with bid taken into account, as well as total time spent in the queue, when deciding who is next in line to be matched
The passengers will then have to wait, and the bid will be taken into account before matching up a driver with riders.
Then, instead of the driver actually receiving the bid --- the bids are pooled and distributed to the drivers fairly based on their percentage of fare dollars collected for passengers moved per mile driven within the surge area.
Previously the answer was regulated taxi companies.
Why did those strange laws an regulations come in to being?
Uber is treading on old ground.
how about letting drivers pick there own prices
You forget that when someone spends, someone else receives.
When the Uber driver gets $100, he can then buy things from someone else, or even bring on a couple of friends to help drive people around.
If the driver recieves 1/10th as much, that's worse for pretty much everyone. It look leave $100 sitting unspent in a bank account, rather than having the rider give it to the driver, who gives it to the carpenter, who gives it to his helper, who gives it to the dance intructor, who pays his rent with it.
All in all, the average is that when someone spends $1 more, it's passed along about 7 1/2 times. So someone spending $100 means that people get paid about $750 before it's "used up" paying for natural resources.
Except it's probably NOT either (1) or (2), but both. It's probably (1), but Uber is keeping an additional or lion's share of the amount of the additional money (As much as it can, after figuring out the price elasticity of the market), and then sharing the additional fares with drivers (Probably a significant portion, BUT as little as they think is necessary to achieve the desired incentivizing affect).
Uber is an experiment at implementing a pure capitalist supply-demand model which causes surge pricing. I'm not surprised that liberal enclaves like San Francisco and New York can't stand this. Uber riders should understand this and seek out the best price by taking a regular taxi if that's what is important. Or wait until the surge passes. Its the exact same model for many toll roads where you pay 1 price during rush hour, but its cheaper later in the mornings.
The drivers experience is no different during surge times, its not as if the act of driving becomes more difficult, there's just more customers for them to work through, making more money. Surge pricing is abusive business practices.
Charge like $25 per month (12 month subscription) to become immune from surges. Uber the company still pays the drivers as if surge pricing was in effect. They set the subscription price such that they make a nominal profit (considering they are taking a risk).
From an economic standpoint, it's a futures market. They work.
From the peoples standpoint, those who are most upset by surges get to pay "flat rate" instead, just like companies buy things they will need on futures markets to avoid price uncertainty.
Riders don't want it, drivers don't really want it, and it doesn't map well to events where surge pricing isn't meant to exist (disasters, large events where cars aren't wanted).
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
Because it involves transfer of ownership. Any attempt to do that on a country wide scale will end in a dictatorship when one ass hat manages to steal it all. This is why I'm a socialist. Let people own whatever the hell they want so long as I'm not made to suffer for the sake of their whims.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
[bromide on surge pricing]
Zil Lanes, like those implemented in car-hostile Atlanta, they're a function of government policy catering to hippies. In the case of the "not a taxi service" Uber, they only survive by intimidating places like New York City, which should have taken the wiser route of Paris.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
[redacted econo-speak]
Just kill the variability model altogether. People want a ride, not the hassle of auctioneering-speak
Taxis do much better than either your model or Uber's existing surge model by providing a consistent price structure. In addition, they provide service regardless of rating.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
What you just described is exactly what we have now. Prices are regulated so that they average out over a period of time to avoid this kind of gouging. We do this so cabs are always available, and we do that because they're a quasi public resource. They're the closest to public transportation we can get in this country. Maybe if we had a real bus and train system I'd be willing to humor you, but as it stands I wouldn't trust Uber as far as I could throw their drivers with their carts included.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
Tax fares are regulated in many areas so surge pricing is not allowed in those areas. Only companies operating illegally would have surge prices.
If you are not allowed to question your government then the government has answered your question.
Being sarcastic doesn't make something false. As to the question, the answer is ignorance.
I've heard some horror stories from Uber drivers. If someone feels like the pricing is unfair, they might pay it, but be looking for any excuse at all to give the driver a poor rating to get back at them for "price gouging".
If you know where you're going the price can be computed, but you can ask your driver to go anywhere once they pick you up. Like someone's heading home, gets a call, and decides to pick up some friends first from a bar in the other direction, the driver will be happy to oblige but it's going to be a hefty bill especially at peak time.
I live in London and use Uber a lot. Whenever I am prompted to accept the surge rates I _always_ choose the "notify me when the surge is over" option. To this day, I have never had to wait more than 5 minutes to get a follow-up alert that "rates in my area have dropped back to normal".
Most "Smart Meters" have built in surge pricing already. Have such use charted, and build it into the Uber schedule. No more guesswork. If a driver wants to make money, they can make themselves available during peak payout time. If Uber wants to make more vehicles available, they need to have times linked to cover their deficit areas to attract more drivers to provide service during those underrepresented times. Don't tell me they (Uber) do not have the data to set something like this up. Nobody would believe it for a minute. If a city is truly worried about licensing and/or insurance, make having a Taxi License and 3rd party insurance mandatory to use Uber in that city/municipality. Many cities are already running sting operations (seen as entrapment by many) to detect and charge Uber drivers as it is. If anyone is savvy enough to have the license and insurance, they might even be able to put together a case for harassment*. *I am Not a Lawyer. No Legal grounds to actually follow this advice is here. Move along.
Surge pricing is the primary reason why I don't use Uber. Predictability of pricing is very important to me, and surge pricing means that I can't predict it. So I won't be using Uber anytime soon.
As to the question "what system would you propose to better reward drivers for working at high-demand times?" -- I don't know, and I don't care. I don't work for Uber. But I'm not convinced that such a thing is needed at all.
Here's my solution - a page on the app that is a taximeter. After all "taxi cab" comes from "taximeter cabriolet". Why shouldn't I, if I want to, be able to follow the price on my device? I don't have to if I don't want to, and the driver doesn't need to bolt in a taximeter like a real taxi. This would let me know if I am running up crazy charges as it's happening, not afterward, and I can stop the car and get out. I had a situation the other day, where I opened the Uber app to call for a car, then it tells me there's x1.9 surge pricing. I tell it to inform me when the surge is over, then I call a regular professional taxi. Ten seconds later, the surge is over, but my taxi in on the way. Part of what's annoying about surge pricing is the whimsicality of it. I understand the "economic efficiency" arguments for surge pricing, but there's also the "behavioral economic" argument against it - that it seems obnoxious and breeds resentment.