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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.
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.
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Not for long.
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Learn to edit, thanks.
They trick the app into thinking their is a shortage
Get gamed by the algorithm.
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.
"Imagination is more important than knowledge" - Einstein
No, it's competitor collusion and an illegal trust as per the Sherman Anti-Trust act. It just happens to be okay if you're not a registered S-corporation.
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It will be widespread.
I'm sure there will be ads like "This one trick will increase your profit from Uber!"
how is this a surprise to anyone?
It's not only about deregulation but about fair pay. They wouldn't have to do this if the company paid well. If they paid well, then the drivers would think twice about it. As it is, you make people desperate enough, make their lives miserable enough then morals and ideals become secondary to survival.
So when all the drivers log back in, the supply goes way up. Surge pricing should drop like a rock very quickly if the system is designed correctly. And if you're coordinating all that effort for only 1-2 drivers to get the boost (and likely not you), that ends this behavior almost immediately.
This is what happens when producers (the drivers) can't freely set their own prices.
If the drivers are really independent contractors (as Uber claims they are) then they should be free to set their own rates. Staying off the road and waiting for surge pricing is just a clumsy way to get around a missing feature in the app. The result is not really great for anyone.... even the drivers, since they potentially will end up with less total profit in exchange for higher marginal profit.
No, it's competitor collusion and an illegal trust as per the Sherman Anti-Trust act.
Dead on.
Anticompetitive behavior: Now, thanks to the Internet, even the little guys get to play.
It just happens to be okay if you're not a registered S-corporation.
Really? Do you happen to know what part of the law limits the rules in that way?
(Serious question: I was assuming that they haven't been zorched because antitrust prosecutions are rare and usually directed at big players, not that the action was legal, or at least not having a defined penalty, for the little guys.)
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
Wonder what would happen if a company develops a passengers cooperation platform that allows users to gang up against providers.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Not sure if trolling, but... Surge pricing comes into effect when there is a shortage of cars. In order to reduce demand and attempt to increase supply, the price is increased. Taxi companies do not have the option to raise prices, and since they are heavily regulated there is a finite number of cabs you can have on the road. Therefore they do not have any mechanism to attempt to limit demand.
I was at a large concert last weekend, when it let out an Uber ride shot to $100+ where earlier it had cost $15 to get there. That same cab ride would have cost somewhere around $20-$25 in both directions, on the way to the concert it would have been OK, but it would have likely taken me 2 hours to get in one on the way home. If I was willing to pay the surge price on Uber I could have been in a car and on the way in 10 minutes.
So my choices were: 1) Be cheap, but not get home for 2 or 3 hours. 2) Pay the exorberant prices and be home in under an hour. or 3) The one I took, jump on the light rail until I was far enough outside of the surge area to grab an Uber home. $5 for the light rail, $25 for the uber. Took a little over an hour to get home.
Because average humans aren't stupid, they just typicaly act stupid because that is how they have been trained to act.
When there's too much supply prices drop. When prices drop people will start to work less. Now the traditional way of working less is that some work the same amount while others get fired. These guys, however, managed to do it in a more sophisticated way, coordinating between each other so the everybody works less. This helps to cushion the blow of the popping bubble. An advantage of Uber are the flexibles hours, which means it's possible for drivers to work less whithout being fired, and use their extra free time to start looking for a real job. Which is a lot harder to do when you find yourself on the street suddenly.
Uber has total control the market (of people using the Uber app). They implemented a stupid pricing algorithm which is easy to game by drivers logging off. Rider wait time would be a better measure, since a driver deliberately withholding rides to make riders wait more would mean the driver gives fewer rides per day thus making less money.
A deregulated market would be a craigslist-type site where people wanting rides post requests. Anybody wanting to give them a ride places a bid (if they're first), or places a lower bid than the previous bid. The rider selects a winning bid after they're tired of waiting for more bids to lower the price. Lots of drivers bidding each rider within x minutes of their request means the price goes down, few drivers bidding on each rider means price goes up. Riders willing to wait for a ride pay less, riders in a hurry pay more.
In a deregulated market, the price adjusts naturally in response to real fluctuations in supply and demand. In Uber's market, their algorithm sets the price, apparently based on an easily spoofed measure of supply.
Only drive on nights of games/conventions, when surge pricing gets me $500 or better per ride. Otherwise I'm home with the family or out doing my own thing. But I can handle making $500 per ride for a couple hours.
If you think I voted for Trump because of this post, you're wrong. I voted for Dr. Jill Stein of the Green Party. Again.
Lookee! It's a market, a free market for transportation! Lookee, pricing is based on supply and demand! Lookee, inside actors are manipulating the market to their advantage! It's like Wall Street in microcosm.
Because they show up when you ask.
Cabs don't really work that way around where I am (or really anywhere I've been with under 250,000 people).
My uber usage meshes with people doing second jobs, cabs can't really cover high demand without taking a bath on capital buying extra cars.
It has nothing to-do with money, and little to do with hatred of talking on the phone, it has to do with availability and quality of service.
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
So reading a website counts as research now? When can I have my PhD?
politicians are like babies' nappies: they should both be changed regularly and for the same reasons
this used to be a site by and for geeks, did anyone on the /. redaction finish high school ?
and 'them' here isn't the drivers, they're victims of circumstance being taken advantage of by their employer. I'm not entirely pleased with the way Uber does business. Such things were banned decades ago when minimum wage law went through. And before you can bring it up we didn't put minimum wage in so teenagers could buy swank cars, we did it because people weren't given enough to live. 20 years of weak wage growth has got us back to that again meanwhile companies like Uber dodge the few protections employees have left.
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It just happens to be okay if you're not a registered S-corporation.
Really? Do you happen to know what part of the law limits the rules in that way?
(Serious question: I was assuming that they haven't been zorched because antitrust prosecutions are rare and usually directed at big players, not that the action was legal, or at least not having a defined penalty, for the little guys.)
You've hit the nail on the head. The FTC doesn't have the resources to go after all the Uber drivers. Sitting ducks like AT&T and IBM are more their speed.
I guess competition his changed things.
I've seen people wait over an hour for a cab when lyft / uber were minutes away.
I've had a cab in NYC slam on the gas when I they figured out I was going to bushwick
I've called and been refused service from a bar a couple times, so much for taking a cab home (slept in car instead).
It's great that where you live all of the cab companies are in an app, and are fast and reliable, that is not the case here. And good luck getting one ever if ten minutes outside of town (75k city, but decent population density suburbs for about a half hour around it).
I would love to pay a fair price (as in sustainable, which I don't think Uber is, lyft may be with tipping), but the cab companies in the greater Philadelphia area (and even Philly outside of center city) make that task nearly impossible.
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
what about the London knowledge test vs uber drivers that just use google?
of course you can. free will. idiot.
Then they wouldn't have to resort to such questionable tactics.
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with a server. that's what Uber and Lyft are
I do not believe in karma. "Funny"=-6. Do good and forbid evil. Yours, Oft-Offtopic Flamebaiting Troll.
it'd be called collective bargaining. Everything's screwed up here because Uber is being allowed to break the law by declaring employees contractors.
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we wouldn't be having this conversation. The drivers would have stopped doing this when they saw it didn't work. It worked because most Uber drivers also drive for Lyft since neither company pays enough to make it to your next rent payment.
Sorry braw, but the free market fails here. That's why we regulated cab companies in the first place.
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We thought Uber created work conditions where collective bargaining and unions could not exist, and here it comes back again. This is wonderful.
The only problem is that without relevant labor laws, nothing will prevent Uber from punishing the workers that have been doing this new kind of collective bargaining.
Just asking..
You're not a slave. It's like you're saying if I start a business, I have to at least make minimum wage at it. That's simply not the case unless you prove that there's an employer-employee relationship.
The dual of the rogue corporation: the rogue union.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
I'm pretty sure that Uber drivers are people, not corporations. As such, they can't really be colluding as businesses.
It's not illegal to collude as employees or individuals. Unless they can argue some kind of fraud, these people aren't guilty of price fixing.
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The thing is, Uber's fares are already artificially low. As I understand it, the company loses money on every fare. It's also my understanding that the drivers are not very well compensated.
In any market, the demand side decides at what price it is willing to buy a product and the supply side decides at what price it is willing to sell. When those two overlap, a transaction can be made. These drivers are reacting to an artificially low supply price. The riders are understandably upset that their fares are going up because they are used to be subsidized by Uber to use Uber. People blame the drivers when really this is Uber's fault for setting up unrealistic expectations based on a short-term business model.
"What the American public doesn't know is what makes them the American public." -Ray Zalinsky (Tommy Boy)
All this article says is that they found drivers who believed this cooperation would work. Pretty typical of advice you might find in a forum. There was no evidence presented that they actually did cause a price increase, TFA even says "It is not clear how much impact the trick has had on prices. "
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