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Uber CEO Faces Class-Action Lawsuit Over Price Fixing (engadget.com)
An anonymous reader quotes a report from Engadget: Uber CEO Travis Kalanick will go to court over price fixing claims after he initially tried to get the lawsuit dismissed. U.S. district court judge in New York ruled Kalanick has to face the class of passengers alleging that he conspired with drivers to set fares using an algorithm, including hiking rates during peak hours with so-called surge pricing. According to Reuters, district court judge Jed Rakoff ruled the plaintiffs "plausibly alleged a conspiracy" to fix pricing and that the class action could also pursue claims the set rates led to the demise [of] other services, like Sidecar.
While Uber has definitely engaged in some questionable behavior, this isn't it... and IMHO isn't likely to go very far at all, even in New York.
Employees of a single company, by definition, can't collude to fix prices. But independent contractors sure can.
Looks like that whole "uber drivers are independent contractors not employees" thing has a lot of unintended consequences that aren't anywhere near as beneficial for Uber as they assumed.
What I don't get about all of this is why taxi companies can't just start offering good service. You know, like they fucking should've been doing from the very start!
It doesn't matter which city you're in. Taking a taxi is a goddamn awful experience. You'll likely end up with a third-world driver who doesn't understand the city's native language(s), nor English (the international language of everyone in the travel industry). These drivers will often drive like they're in a third-world country, putting you and others at risk. Sometimes they won't have a clue how to get you to where you need to go, even if it's somewhere relatively well known in the city at hand. Other times they'll take an indirect or slower route to unnecessarily boost the fare. Often the cabs are dirty and not well maintained. It's not at all unusual to have the driver play awful third-world music on the radio, or converse loudly in some third-world gibberish language using a hands-free set, for the entire trip. Then for this awful experience you'll get to pay an excessive price. And to make matters worse, they'll blame this awful experience not on themselves, where the blame rightfully lays, but on "regulation", "the government" or "city council".
I don't want to use Uber. I don't trust hipsters or Millennials behind the wheel, regardless of whether I am or I am not in the vehicle. But they're absolutely golden compared to their taxi driver competition!
Uber wouldn't even exist if the taxi drivers and the companies employing them had just cleaned up their acts in the first place. Offer a good service at a fair price and the Uber issue goes away!
For that matter, why not just move on to seasonal pricing? What's the difference?
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Maybe what you consider a fair price is the price at which you get a "third-world driver who doesn't understand the city's native language(s), nor English".
Because meaningful background checks, adequate maintenance, and paying people what they're worth costs more than padding some political pockets.
Yep.
Whenever I hear business say that they are "following the law" it's a wonderful copout because they are the ones who use their clout to make the laws - the rules. They make the rules so they win and everyone else loses; many times under the guise of "protecting the public".
And capitalism is supposed to work with some government rules. Without government rules, we'd have Somalia or Mexico - that's what you get when you have a weak federal government. Without some way to enforce contracts, force people from poisoning the water, air and food, unscrupulous operators will do it. Nineteenth and early twentieth century US economic history is loaded with examples of people abusing the freedom they had for the sake of profits. And Uber should follow some regulations
But what has happened now is the pendulum has swung so far to the right that incumbent businesses are using regulation and IP laws to keep their market position. It's one thing to give incentive to folks to create, it's another to stifle an economy.
But we do have to be careful not to swing back to the left of Laissez-Faire Capitalism where we're back to an anything goes attitude.
Airlines hire their pilots, train companies hire their conductors, etc. But Uber claims that their drivers are not employees, but rather independent contractors. If this is the case, then there is price-fixing.
I'm sorry, the number you have dialed is an imaginary number. Please rotate your phone 90 degrees and dial again.
Because all of those are single companies making decisions alone. Whereas Uber is conspiring with a set of independent contractors to set the price, because Uber has made it clear that they are NOT employees.
At least that would be the argument -- not that I necessarily agree with it.
Taxi companies have to pay to purchase, service and garage their taxis whereas Uber pays exactly $0 for the above expensive costs, instead it leeches them from the driver. Given the above, since the driver is doing the bulk of the investing of resources, he should get more than the 70%.
We can hope there are dozens of internet-taxi booking services like Uber, making their service a commodity. Then we would have to pay only a token service charge around 5% of the fare (instead of 20%-30%) to the internet-taxi company.
As a driver, you have two choices: you work for a taxi company or you work for Uber/Lyft/... Working for a taxi company, you get about $12/hour, at inflexible working hours and little personal freedom. The benefits of the taxi monopoly do indeed accrue to the "taxi companies", crony capitalists who have managed to snag medallions. Working for Uber, you are probably going to make more than that, even after expenses. But even if you made the same hourly money, you'd still be better off because of better working conditions and more flexibility.
There won't be if idiots like you keep supporting crony capitalism and keep creating legal hurdles for companies to jump through. After all the shit that Uber has had to deal with, only a fool would start a competitor.
including hiking rates during peak hours with so-called surge pricing
Oh no he's charging more when the supply can't keep up with the demand! how dare he?! Reminds me of the Taiwanese flood that disabled hard drive factories, hard drive prices shot up because supply twiddled. How is that immoral (let alone illegal) in any way? It's completely benign, they should go after assholes like Marty Skreli instead, and assholes that profit only from arbitrage and asshole tactics.
Why the fuck can't taxies just offer good service?
Until Uber arrived on the scene, they clearly didn't feel they needed to.
Given the above, since the driver is doing the bulk of the investing of resources, he should get more than the 70%.
As he does; with UberX/XL, he gets 80%; with UberBlack 75% and UberSUV 72%.
Taxi companies have to pay to purchase, service and garage their taxis
Actually, most taxi companies do none of these things. The taxis are owned by the drivers, and the driver pays a fee to subscribe to a dispatch service provided by the taxi company. In some cases the taxi company will also rent out medallions, but in many cases the driver owns the medallion.
You are right, a foreigner who can't speak English, and has no money has the capability to buy a used car, repaint it in the taxi colors, obtain a medallion and operate it using taxi company only for booking. Yeah, right.
Speaking of hurdles, isn't this story about Uber setting up financial hurdles to prevent other internet taxi companies from entering the market and bankrupting the existing ones? Hypocritical much, mister crony? It's only bad if others do it, not your favorite company.
Diff AC here. From the city I live in, I can take a bus or train to other cities hundreds of miles away for less than the price of a short in-city cab ride. These buses and trains aren't particularly full, but they are well maintained. Something is strange when the cost of a 5 mile trip in a normal car driven by somebody with little more than a driver's license costs more than trips 50 times farther in much larger and more specialized vehicles requiring specially trained operators.
But can you explain why the consumer should pay more than 5% of the fare for the simple service of: "I'm at location X, find a nearby taxi willing to go to location Y?" 20% booking commission is outrageous.
You are right, a foreigner who can't speak English, and has no money has the capability to buy a used car, repaint it in the taxi colors, obtain a medallion and operate it using taxi company only for booking.
Most immigrant drivers pool their family money to buy the car, and then drive it in shifts with other family members. If a taxi is operating in three 8 hour shifts, seven days a week, it will pay for itself very quickly. Renting the medallion is a way bigger expense than paying for the car.
Very well said.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
And what average wage do people make with Uber? I've heard in other threads if you want to make any money at all you have to go out when rates are high, thus losing flexibility on working hours and personal freedom.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
But can you explain why the consumer should pay more than 5% of the fare for the simple service of: "I'm at location X, find a nearby taxi willing to go to location Y?" 20% booking commission is outrageous.
Can you name any service that charges less than 10%? Amazon, ebay, itunes, youtube, etc.. all charge a fairly hefty fee for bringing the customer to seller. Craigslist is the exception but they even charge significant prices in certain markets and they only have very basic search functions and have no way to bill or rate the other side. In theory you could hitch a ride on craigslist but not quickly. The best we can hope for is that competition continues to drive the price down but a company that has more drivers/clients and better features will continue to command a premium. The other thing that will help prices continue to drop is to make sure that uber, etc.. doesn't prevent drivers from driving for multiple services. A peer to peer service would be best but there is no real incentive for a company to create such a thing and there are plenty of incentives for a company to try to corner the market.
That is a rarity... most taxis are rented.
http://work.chron.com/much-far...
Whenever I hear business say that they are "following the law" it's a wonderful copout because they are the ones who use their clout to make the laws - the rules.
I haven't heard of any Taxi companies setting the laws, however I have heard of Taxi driver unions doing so.
Yes but they are calculating that "optimal price" under the assumption everyone else follows that price. That is it is optimal only under the assumption of no defectors competing. that is when you fix the price by any means it is price "fixing".
Some drink at the fountain of knowledge. Others just gargle.
The Uber taxi service has been flouting the law since day one. Their taxi service does not pay the same fees, insurance os taxes that every other taxi service does, even though the people they hire are paid by them and rely on the services the Uber taxi service provides.
Not sure how this isn't obvious. The Uber taxi service is trying to simultaneously claim they don't fix prices while at the same time clearly doing so.
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
Between their licensing violations, classification abuse of contract workers, and their screwiness with pricing, it would be quite good to see the courts turn Uber to (a litigious equivalent of) a smoking crater.
Get rid of those three issues, and you would have a company that isn't sued for its Shkreli-like existence.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
But can you explain why the consumer should pay more than 5%
I don't need to. Either the consumer is willing to pay more than a given amount or they're not (as the case may be); regardless, that [respective] choice quite effectively communicates everything they need it to (except, perhaps, to fools and shills)
Huh?? The employment status of Uber drivers is entirely orthogonal to the ethics and/or legality of "surge-based pricing." Anyone attempting to conflate these obviously unrelated issues clearly has an agenda.
In Ottawa at least Uber came and they still haven't felt the need to offer good service. I should note that I have come across the rare good taxi driver so they do exist in Ottawa but the majority of them are more interested in their phones, for personal use, than dealing with their clients.
People are debating that, but it appears that generally, Uber drivers generally make about the same or a bit more than taxi drivers after expenses. You can Google it yourself.
According to what I googled, they make around $36 an hour.. which isn't very much considering it has to cover the cost of the vehicle, maintenance, insurance, et al. If a taxi driver makes $12 an hour, at least that is in the clear.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
Also I could find no details on how flexible the hours were if you wanted to make that $36 an hour. I've heard of Uber drivers going out in low times and making $2 an hour. Apparently Uber has a policy against drivers talking about their actual earnings after costs.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
The average cost per mile for US cars is about $0.60/mile. So, an hour or driving at around 20 mph (NYC, SF average speeds) amounts to about $12 in "cost of vehicle, maintenance, insurance, etc.", leaving the Uber driver with about $24/h. But, actually, Uber drivers can substantially lower their average costs per mile, so it's likely even higher.
Perhaps $0.60/mile for maintenance, but you also have to take into account that an Uber driver will be driving that car into the ground a few years before they would if it were a personal car and they're not going to get anything for it at the end. I highly doubt that figure takes into account the actual value of replacing the vehicle.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
That includes everything.
Why do people like you insist on substituting their own prejudices and superstitions for facts?
These figures are for an average passenger car, not one that is being driven 8 hours a day. Ask a taxi driver if their cars 'depreciate' $3,654 a year and they're likely to laugh in your face!
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
Your responses are as predictable as they are stupid. I suggest you figure out for yourself why the depreciation works out better for Uber drivers than for "the average passenger car".
I also find it fascinating that people like you try to argue that something results in substandard wages when Uber has 160000 drivers in the US alone and so many taxi drivers are switching to Uber that taxi companies have trouble filling their shifts. Do you think all these people aren't doing the math on their expenses? How utterly ignorant and arrogant do you have to be?
I didn't give you those numbers to prove a point, I was pointing you at those numbers to give you some background information for you to understand an economic reality that obviously baffles you. Now stop making a fool of yourself and stop trying to argue that the earth is flat.