Uber Drivers Gang Up To Cause Surge Pricing, Research Says (telegraph.co.uk)

Researchers at the University of Warwick found Uber drivers team up in gangs to force higher prices before they pick up passengers. How do they perform such a feat? They trick the app into thinking their is a shortage of cars in order to raise surge prices. The Telegraph reports: According to the study. drivers manipulate Uber's algorithm by logging out of the app at the same time, making it think that there is a shortage of cars. Uber raises its fare prices when there is a high demand for vehicles and a short supply of drivers available. Fares are known to increase during peak times such as rush hour, during public events and late at night. Surge pricing can boost the cost of rides to multiple times the normal rate. The study said drivers have been coordinating forced surge pricing, after interviews with drivers in London and New York, and research on online forums such as Uberpeople.net. In a post on the website for drivers, seen by the researchers, one person said: "Guys, stay logged off until surge. Less supply high demand = surge." The researchers said the collusion reflects driver dissatisfaction with Uber's policies regarding them, and exposes the "ethically questionable" nature of its algorithm. It is not clear how much impact the trick has had on prices. Uber denied that the practice is widespread.

Comments

Isn't deregulation wonderful?

[rsilvergun]

This is what you get. One hell of a race to the bottom. Seriously, we didn't regulate cabbies because we were poo-pooing all over their fun. It was crap like this.

Re:Isn't deregulation wonderful?

[known_coward_69]

Are you upset that people who you thing are dumb figured out a way to get money out of you?

Re:Isn't deregulation wonderful?

[Anonymous Coward]

The irony (?) is that /. readership is up in arms when IT jobs in the West are threatened. THEN apparently we need to start taking our laws, traditions, and workforce more seriously. When it's anybody else's profession, then *shrug* that's progress, right? I get my rides and stuff cheaper!

Re: Isn't deregulation wonderful?

[jenningsthecat]

A way that is completely dishonest should be treated as fraud.

I fail to see how it's dishonest. When they're logged off they are unavailable by definition; there's nothing in the rules that says they can't coordinate their unavailability, and the whole point of being an Uber driver is being able to work only when you want to do so. They're simply using the system to their benefit - and if you're upset with that, you need to direct your anger at people way, way farther up the socio-economic ladder, as well as a very long way back in history. And hey - the drivers didn't actually create this specific system which allows one party to take advantage of another - that would be Uber's 'accomplishment'.

Re: Isn't deregulation wonderful?

[serviscope_minor]

there's nothing in the rules that says they can't coordinate their unavailability,

If independent, competing operators collude to raise prices, it's price fixing.

Re: Isn't deregulation wonderful?

[Kjella]

Agreed, this is totally cool. But it's a loophole and if it's a real concern I expect Uber could easily fix this with a little tweak of their algorithm. For example if they see a suspicious dive in the number of active accounts they could start issuing quarantine periods before you can get rides and/or surge prices again or add some kind of "full shift" bonus for accounts that remain active. Unless it's just surge drivers intentionally waiting it out until there's a surge, but even so if you see a large coordinated action who all come online the moment there's a surge they can just play it evil by not surging to see if some will defect to at least make some money and instead take the customer service hit. Or create some kind of decreasing "if there is a surge in the next hour you get X% bonus" to make people break ranks and get their bonus but that eventually with enough joining there won't be a surge. Lots of ways for Uber to pull a Darth Vader on this one, all they have to do is make it attractive to defect and it'll fall apart.

Merely of an extension of what Uber already did

[evolutionary]

Well no surprise there. When you have systems that just increase prices blindly when there appears to be less supply, of course the drivers are going to take advantage. The drivers as well as the owners are all playing the same game. And of course, we all lose. The idea of automatically increasing a price due to perceived lack is easy to abuse and fake. The real problem is there is no government agency holding Uber subject to any regulations or lawas that would control such of abuse. This is clearly price/market fixing, but the government agencies always seems to wait until someone does the obvious, look for a platform to exploit for elections, and then they do something very minor (or nothing in reality because the corrupt business greases the wheel). This is what info collected from those apps installed was used for ladies and gentlemen. Apps aren't needed for this service (web portals are fine) but they get sweet info for the business to exploit. The Drivers just made it more obvious and spelled out for us what we would already know if we were paying attention. It's no less wrong for the drivers than it is for Uber. At least Taxi drivers aren't at liberty to do this sort of rate hiking, at least not in North America to my knowledge, but then again, they are regulated. Uber is not. I was never a fan, not because I'm loyal to taxi drivers, but because the history of these services, the mandatory use of an app for this services, as well as the personality of the owner, all pointed to behavior of this nature. We either need more competition to keep Uber honest or people need to boycott Uber until they use a flat model pricing model. Easier to compare against the competition.