Slashdot Mirror
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.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
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
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.
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.
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.
Yup. People learn how to use the system to their advantage. One problem with this sytem is Google. If you set a destination and get directions under hire it will show Lyft and Uber fares so if ine has surge and not the other guess who will get the business? Fare transparency overcomes collusion in this case. Unless most drivers drive for both and do this in both cases it is not a good long term strategy. In addition, Uber and Lyft could monitor the drivers and penalize collusive behavior. For example any driver who dropped off and came back when surge pricing started could simply not be given ride opportunities until the surge ended. Thus drivers who didn't game the system would get the benefits while those who do lose money from their collusion.
I'm a consultant - I convert gibberish into cash-flow.