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Uber Starts Charging What It Thinks You're Willing To Pay (bloomberg.com)
An anonymous reader quotes a report from Motherboard: Uber drivers have been complaining that the gap between the fare a rider pays and what the driver receives is getting wider. After months of unsatisfying answers, Uber is providing an explanation: It's charging some passengers more because it needs the extra cash. The company detailed for the first time in an interview with Bloomberg a new pricing system that's been in testing for months in certain cities. On Friday, Uber acknowledged to drivers the discrepancy between their compensation and what riders pay. The new fare system is called "route-based pricing," and it charges customers based on what it predicts they're willing to pay. It's a break from the past, when Uber calculated fares using a combination of mileage, time and multipliers based on geographic demand. Daniel Graf, Uber's head of product, said the company applies machine-learning techniques to estimate how much groups of customers are willing to shell out for a ride. Uber calculates riders' propensity for paying a higher price for a particular route at a certain time of day. For instance, someone traveling from a wealthy neighborhood to another tony spot might be asked to pay more than another person heading to a poorer part of town, even if demand, traffic and distance are the same.
Other companies will adopt this as well. They will charge you what you are willing to pay them. You won't even be safe outside of the online world, in retail shops the price tags will adopt depending on the time of day and maybe even, combined with face tracking, who is around.
Simple then, just take your Uber ride to the wrong side of the tracks, then walk across the tracks to the right side where you live.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
"...How much you got!?"
(I think they call this a shake down)
So now do you understand why taxi companies are regulated?
Dahon makes these wonderful fold-up bikes you can take on mass transit and not look like an asshole (though you will look like a bear riding a bicycle).
When you make pricing unpredictable, customers are going to stay away in droves. As will I.
"But you're taking your life in your hands by biking in Boston"
It's not any worse than say, Providence or Warwick.
--
BMO
Tony the tiger??? Is it great? Tigers have stripes, not spots.
...Uber starts paying its drivers what it thinks they're willing to accept.
"choice", hehehe.
We want.....a SHRUBBERY!!!!
Someone travelling from a poor neighborhood to a fast food joint when the work shift starts will be asked to pay more than someone going from movie theater to starbucks, because the former might not have any other transportation and can be squeezed dry.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
isn't the purpose of Taxi regulations is to make sure that the price is consistent regardless of time of day or distance? Oh wait, Uber thinks they're exempt from taxi regulations
Just as has been occurring for the biggest part of human existence. The idea of a set price and or posted price tags is relatively new to civilization.
https://www.quora.com/When-dur...
errr....umm...*whooosh* *whoosh* Is this thing on ?
"...someone traveling from a wealthy neighborhood to another tony spot might be asked to pay more than another person heading to a poorer part of town..."
Quite clearly discrimination based on race.
I honest didn't give a damn about all the weird stuff Uber and its CEO have been doing to various parties. All politics, embarrassments, etc. - don't care... As long as 1) the ride is cheaper, and 2) the drivers are good, that's fine.
This change, however, strikes a nerve for me personally. It's a combination of Big Brotherly data accumulation and usage against people, along with a heaping helping of, "Screw you, rich boy," shakedown.
If this is the way data collection is going, and how it'll be used, then THIS kind of abuse of people's wallets may finally be what wakes up the average Joe as to why privacy still matters.
Too many hills. We'll all have to move to the East Bay where it's flatter and cheapper, but hotter and boring.
“Common sense is not so common.” — Voltaire
I think it is time to take a Lyft :-)
so.. it has the desired effect - budget concious customers hold off until the price drops, and those who really need the items right now can still get them albeit at a higher cost. Would you rather they keep the price constant and run out and then no one can get the item at any price for a while?
Can you be Even More Awesome?!
I could just call a cab with proper insurance.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
The flaw is that Uber is no different than traditional taxis except it uses a mobile app. Its like 90s patents all over again, tack "on a computer" or "through the internet" to any mundane idea and suddenly its 'novel'.
Its more like me starting a company for the sky sharing market, where I sell seats on planes that ignore all FAA rules and use highways for landing strips. Don't regulate me bro, I'm innovating.
(Like hell I'm paying an extra 25% for a DOCSIS 3.0 modem.)
This is exactly how markets are supposed to work. If there is a temporary shortage, the price should go up so that people with an urgent need can get what they want, while people (like you) that are willing to wait get lower prices.
"...How much you got!?"
(I think they call this a shake down)
Yes and no. Uber does not have a monopoly, and people can comparison shop to Lyft or even a taxi or public transit.
If and when they get caught charging more based on phone battery life, then they should be hanged. Until then, remember that price discrimination on its face isn't actually irrational.
People have different utility functions. A ride is worth more to one person than to another. And the fact that Uber is not a monopoly means that customers can comparison shop, at least for now. (This will become more of a problem as price-fixing algorithms converge to best).
The moral problem arises when there is so much discretion that people start using it to discriminate based on things that our morals say it is not okay to discriminate based on--such as race or religion. Similarly, a problem arises if an algorithm accidentally starts doing that.
For example, if the algorithm charges people more when they are trying to go to church, there could be an issue...
Real lawyers write in C++
We live about 18 miles from a major airport. Taxis cost about $52 one way. Uber/Lyft each come in at about $29-$32 one way. I'm actually okay with paying around $40, as I think the taxi is a bit on the higher side, but Uber/Lyft is on the lower side.
Uber has learned what airlines have long known - you can screw the customer over at will and with little fear of retribution because you're not the one at the pointy end of the customer-interface spear. Gate agents and check-in agents take 90% of the heat for airline behavior, and Uber drivers, who aren't getting any of the extra cash, will take the heat for the Uber higher-ups who make the policy, set the prices, and rake in the cash. Capitalism, gotta love it.
Yes, price discrimination is third world.
That was one reason we tried to eliminate/reduce it in America. It is why car dealers are so reviled - because they have always fought to keep price discrimination, which heavily favors the seller, as they have the overwhelming information advantage, and cars for many are a necessity.
Even pricing boosts the economy because it eliminates the friction costs of bargaining.
Instead of importing your bad third world ideas to America, why don't you go back to your namesake shithole? You seem to prefer the corrupt, polluted, fascist third world like Chyna, so go the fuck back already and leave America to real Americans.
Wow, no company ever went from "price renegade challenger" to "price gouging incubent" that fast.. Uber is probably right that it's possible jack up the profits that way but inflated margins means more money on the table. And people will notice that shit. Next step would be to limit competition through lobbying..
I kind of lilked Uber when I was too sick to drive myself to the doctor's appointments. The drivers were usually pretty willing to give me an extra hand. Then I noticed something on my home LAN reports. A lot of connections to a HTTPS address I didn't recognize from my phone. A look up of the domain name came back with a private registration, and the IP addresses were allocated to large ISPs without sub-allocations. The certificate details weren't too helpful either.
So I started deleting apps from my phone. When I deleted Uber, and did a bare metal reload, those connections stopped. Since I didn't do a bare metal reload before deleting everything else, I can't say Uber was the cause. But SOMEONE was sure wanting to know something fairly often - twice to four times an hour.
Aside from the fact we already know from other reports that Uber likes to slurp data, and aside from avoiding rules largely placed as protectionism for Taxi services, I found that Uber did kinda meet my needs.
But not putting aside other considerations, I think Uber Corporation is being evil.
Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.
This is exactly how markets are supposed to work. If there is a temporary shortage, the price should go up so that people with an urgent need can get what they want, while people (like you) that are willing to wait get lower prices.
I will give you a nice example how I saw the market working. A dozen years ago, the drivers driving petrol trucks in Britain went on strike. Huge queues at all petrol stations. One owner of a petrol station decided to take advantage of the situation and doubled his prices. People had to pay, he made a mint.
Then the strike was over. His petrol station was absolutely empty. It took six weeks until he was bankrupt. And that's how it should work. Gouge me and there will retribution.
Huge queues at all petrol stations. One owner of a petrol station decided to take advantage of the situation and doubled his prices.
There are plenty of people who would much rather pay double than waste an hour in a queue. These people would be grateful that someone had the sense to price to market.
People had to pay, he made a mint.
Except that no one HAD to pay. They could continue to wait in the queues at the other petrol stations. They were just offered the additional option of paying with money rather than time. Since he "made a mint" it is clear that many people preferred than option.
Then the strike was over. His petrol station was absolutely empty. It took six weeks until he was bankrupt.
Of course you just made all this up. In the absence of price controls, ALL of the stations would have raised their prices. Feel free to provide a citation to prove me wrong.
Why stop at setting fares based on "how much *groups* of customers are willing to shell out "? Uber has a personal relationship with you, don't they? So they can experiment with your *personal* willingness to pay ... if you are a regular customer, they can keep upping your price a little bit, then do it a little more at rush hour to see how likely you are to accept high rates under stressful conditions. Come to think of it, maybe they can figure out a way to get your heart rate from your smart watch to get an even better read on your state of mind.
My Libertarian friends will probably still say that the market will sort it out. Free foxes in free hen houses! But maybe we can save everybody a lot of grief by reigning in a company that has shown so many times that it will do whatever it can get away with.
I could do with some free cash after a ride.
Requiem for the American Dream
This sounds like a really dangerous strategy for me. Part of Uber's business model (that has come under legal threat in several countries already) has been to portray themselves as a service that, for a fee, brings customers and independently operating drivers together. With this new pricing however, it sounds more like they are offering the service of transportation to the customer and subcontracting it out to particular drivers. This is not semantics - i has potentially huge legal ramifications. If Uber is seen to be the party that takes the largest share of business decisions here - e.g. pricing - and the drivers really have little or no freedom to operate independently, then drivers could be considered employees and Uber a regular taxi company - with all the regulation this implies - including fixed rates and potentially also the need to purchase permits from local municipalities. The original way of merely being a platform for passengers and drivers basically precludes Uber from optimizing the pricing - as this is not their job. They could offer a platform to drivers to only suggest potential prices to charge to drivers - and then taking a fee for this suggestion service. This would allow them to still function as only an intermediary. But this does not seem to be what they are doing. I think this is a very desperate move that could result in a lot of legal problems and potentially a threat for the entire business model.
What you are willing to pay? Or what you are able to pay. This sounds like a progressive tax system to me...I already get screwed on my taxes, now I have to pay more because I make more?
I have used Uber when I was sick.a lot around at the end of the year.
This week I had too training events where I wanted to arrive on time and without worries, and I got Uber - the prices were more expensive than they should be.
From that and this notice, I think Uber is also penalising more frequent users, from them to subsidise lower prices to attract new users.
Is it a good strategy? I often used Uber because the prices were attractive; if suddenly they are the double, I will start using more my car.
As a brief example, today I went by Uber to a training conference, the price was a bit steeper than usual; returned by tube. If the price was slightly low, I may had not take the trouble to return by tube, and Uber anecdotally would have had a little more profit.
What a joke, Uber gets caught committing fraud and so says it meant to do that while screwing both employees and customers.
“Jokes? There are no jokes. The truth is the funniest joke of all.”
- Cassius Clay as Muhammad Ali
Uber is no different than traditional taxis
Their drivers can't just pick random people up off the street. They have to be dispatched through the app. That makes them more like a limo service than taxi service. Any hired car service but a taxi would be an apt comparison, but I don't see the taxi connection.
If the "shortage" was a lean inventory failing to predict demand, then it could just as well be artificial. If it was an industry-wide shortage and not just ordering late from a supplier, it makes sense.
This is just another one of the many reasons I'll avoid Uber. Unless I'm desperate, I won't use them, and unfortunately, if I'm desperate their algorithms will probably fuck me extra hard in my time of need. Thanks, Uber.
Die, Uber, die. (That just means "The Uber, the", as Sideshow Bob will attest.)
Just cruising through this digital world at 33 1/3 rpm...
So under this premise Uber could charge more for someone going from Apple's Campus in Cupertino than they would in East Palo Alto for going the same time/distance?
We're nolonger in an age where a ride is based on time and distance, but on your economic standing.
What about charging more for "dangerous parts of the city"? $5 more for picking someone up in Oakland rather than Atherton (home of the CEOs)?
Or you could crank it up $10 more if you were going to the airport (bonus if Uber could determine when your flight was and jack up the price if they thought you might be late and needed a ride right now!).
What about automatic "surge pricing" if you were taking an Uber to the hospital? Surely, you'd be willing to pay an extra $20 if you were in labor?
Just delete these MFers and use Lyft or, god forbit, a taxi. The sooner uber goes bankrupt the better.
...they are just joining the rest of the world's pricing strategy:
* airlines set ticket prices largely based on willingness to pay, which is why a short flight between Calgary and Ft.McMurray in Canada full of oil workers costs more than a flight from Canada to Europe or Asia.
* hotels price their rooms based not only on demand but where their customers are visiting from...Americans often get better Vegas deals than Canadians and Europeans, and room prices go up during conventions so the "special convention rate" looks like a deal even though it is pretty much the same rate as non peak.
* Microsoft and most other closed source software companies charge higher prices in Europe and North America in isolation of actual demand because of their willingness to pay more in licensing.
Uber's pricing model was destined to become more complex and opaque...I'm sure bistro math is incorporated somehow at this point. It's like entropy really.
Back to the robber baron times.
People think they are smarter than their grandparents when actually they are so much more dumb that they don't even notice it.
You see, there is a reason for regulations, for fixed fares, for trade union wages and all that "evil government" stuff. The reason is called peace of mind.
Sure I can go through life negotiating every small deal, always checking all the prices, always on the edge making sure nobody takes advantages of me while I try to use every opportunity there is. What a stressful way to live your life!
When you travel the same way multiple times, you learn very fast how much the taxi rate is. If you travel in the same city a lot, you can quickly make reasonable estimates. Because of fixed prices. I can decide to take the taxi to the airport tomorrow, estimating what it will cost me and deciding the saved time is worth it. But when prices change all the time depending on a hundred variables half of which I don't even know, then there is no such calmness. I need to check all the different driving services and compare, and just before booking, not the evening before. Then I need to make sure none of the surge charging or other modifiers changes the price at the last minute.
Why should I fuck my brain like that to maybe save a few bucks? Why should the driver go to work in the morning with not the slightest clue how much he'll earn today? The slavery to market mechanics sucks the souls out of all the human beings involved in the transaction. You can do business like that when you have machine-to-machine trading, but us humans, for us all of this dealing is not an end in itself, it is just a tiny part of the life we live, and the mental burden, the uncertainty and unpleasant surprises have an effect far stronger than the monetary optimisation effect.
The "gig economy" is not a new invention. Millions of people throughout the ages lived their lives like that. Short, miserable and poor lives. Nobody ever became rich with gigs. It's just a trick to swindle us out of the health care, unemployment and other social security systems that older generations fought and died for to establish. Everyone pushing this misery ought to be ashamed and beg for forgiveness at the graves of their grand- and grand-grand-parents.
Assorted stuff I do sometimes: Lemuria.org
Or it could be that no one was willing to pay that price, and his station sat empty. Until that is all the other stations ran out of petrol....
And people who needed fuel HAD to pay his price, because he was the only station that still had petrol available and they had no other choice but to pay up or do without.
This is called price gouging, and there are laws against it in many jurisdictions. Even if it's not illegal, many still consider in unethical and people resent being taken advantage of. If a station served mostly locals I could see them taking a pretty big hit once things settled back to normal.