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?

[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.