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@RyanHentsch "I say bullshit I'll wait 10 minutes longer and pay my normal $18 (vs $45)"
Then wait the 10 minutes and take a taxi. What's the problem? What Uber offers is, for a premium, you can buy your way out of the uncertainty ("Maybe a vacant taxi will wander by in the next few minutes, maybe it won't... we wait as long as we wait..."). If the price of that certainty is more than you want to pay, then don't use them.
In fact, I'd say that your comment is a *defense* of Uber (at least from the gripes people have against the surge pricing). Uber doesn't have you hostage. If their prices aren't to your liking, you can (and *do*) use alternatives.
7 months, 2 weeks ago on The problem with Uber’s surge pricing isn’t the money. It’s an increasing lack of trust
@kevinkelly262 Re: "Hey everyone, we're the smug jerks from college who loved Ayn Rand. Don't like our prices -- take it or leave it, see if we care!", I've never heard the execs at Uber expound anything about Ayn Rand, so I'm not sure where you're getting that from. Besides, allowing prices to quickly adjust to shifts in supply and demand have very little to do with the social-darwinism of Rand.
"Uber, on the other hand, gives you a pricing equation with a rapidly fluctuating surge factor. Instead of a simple price, or at least an estimate...". Have you *used* the app? Have you *noticed* the little "Fare Quote" button after you set your pickup location?
"Right now Uber essentially has a temporary monopoly", so... you mean *other* than Lyft (who *also* rolled out surge pricing late last year), Sidecar, and Hailo? Yes... if you ignore those three other competitors, then Uber has a monopoly.
"Once their monopoly fades, Uber will get their own harsh lesson in free market economics.". No, their competitors will. In a storm or during rush hour, someone will try to find a ride with Hailo or Sidecar and there won't *be* any, because all of those fixed-price rides got snatched up early, and then they're going to sigh and go to their Uber app. Lyft has already learned this lesson... that raising price is the *only* way of rationing a scare resource while *also* increasing the *supply* of that resource. In other words, even if Lyft and Uber are making the same profit per *ride* during surge pricing, they're going to log more *rides* than their non-surging fight-the-good-fight-but-lose-anyway competitors.
8 months, 2 weeks ago on The problem with Uber’s surge pricing isn’t the money. It’s an increasing lack of trust
@pbreit Okay, so exactly *how* should Uber ration the shortage of drivers, then? There are going to be a lot of people wanting rides who aren't *getting* rides. How do we select the losers so that they don't blame Uber for it? A lottery? First one to solve a puzzle? How?
Keep in mind that, if prices aren't able to surge, then there will be fewer drivers during storms, so even *more* people will be left without rides. So, if stranding more riders is a good trade-off for getting people not to blame Uber, then lets go back to when there *was* no Uber and *all* of those would-be Uber riders were stranded.
9 months ago on The problem with Uber’s surge pricing isn’t the money. It’s an increasing lack of trust
@pbreit @ken_hirsh Well, if your beef is with the unpredictability, then I think the problem is that Uber has developed a way to rapidly adjust price to correct for supply and demand shifts. It's as though every request for a ride is a momentary auction in competition with other customers (not quite *that* dynamic, but you get the idea). Whereas Amazon or Walmart might change their prices only weekly (and they're perfectly content to let a suddenly-popular item just sell out instead of dramatically increasing the price to ensure that at least one of the item is left in stock for someone who really wants it), Uber has decided to let their pricing respond quickly, and without artificial constraint, to the dynamics of changing supply and demand.
I imagine that we're going to see more instant-equilibrium-pricing systems like this, in the future. It's just one of those things that a global information network does really well.
Oh, I forgot to add: I imagine that part of the reason we don't like using price to do the rationing of the scarce good is because that means that it's all usually going to end up going to the rich people. At least first-come-first-served or random-selection seems a bit more egalitarian, but they don't help to increase the quantity supplied.
No, the *real* problem with Uber's surge pricing is that people don't understand economics.
When there's a storm, there's a decrease in *supply* (the number of drivers willing, at the usual fare-rate, to go out in that weather goes *down*). At the same time, there's an increase in *demand* (the number of potential customers who, at the usual fare-rate, would opt for a car instead of walking goes *up*). So, there's a shortage.
Whenever there's a shortage, some kind of rationing has to happen. We could ration in a variety of ways: first-come-first-served, we could maybe appoint some politician or bureaucrat to select who gets rides, we could do it by random selection, or we could just raise the price until some of the customers just turn away.
A few nice aspects of raising the price are that: 1) It tends to select the individuals who want rides the most. At surge pricing, someone who only needs to go one block is more-likely to decide to walk than someone who needs to go 3 miles. 2) (and this is a biggie) It increases the *supply*. For example, *without* surge pricing, if only 10 drivers are out on the road, then only 10 riders are going to get rides... no matter *how* we choose those 10. But, *with* surge pricing, more drivers are going to brave the elements to get out there, and we'll get, let's say, 30 drivers. So, now, 30 people are going to get rides.
If it sounds like I'm praising profiteering, it's because I am. This isn't any different from when a natural disaster hits some state and there's a shortage of fresh water. Now, at $30 for a gallon, there are lots of people in neighboring states who would load up their trucks with fresh water and drive non-stop to get the water to those who need it... and those who need it would only buy what they really needed. But, with anti-profiteering laws placing caps on how much you can charge, those people in neighboring states are going to just stay put right on their couches... and the people who need water won't be able to get *any* at *any* price.So, Uber is just shifting the price until they find equilibrium (that point where the supply and demand curves cross in your high-school economics class). There's nothing baroque about it. If the number of ride requests is greater than the number of available drivers (a "shortage"), you bump the price up. If there's still a shortage, bump it up again. Don't blame Uber for this. Blame the other customers who, like you, don't want to walk in the rain and the drivers who don't want to drive in it.
@rp399 That's not surge pricing. That's just what happens when firefighting is paid for on a *per-person* basis. If you didn't pay, you don't get your fire fought. Even if they had shown up and offered some kind of increased "late subscription" rate, that's not surge pricing (when the equilibrium price changes because of a increase in demand... which would only happen if a bunch of homes caught on fire at the same time). No... charging someone extra *when* their home is on fire is just plain ol' price discrimination (charging more from the people who will pay more) like is done with short-notice airline tickets.
@ChrisGoodson Exactly. It's like, when you finish your marathon run in 6 hours, you get to say that you've "caught up" to the dude who finished in 2h23m...
1 year, 1 month ago on Access denied | Foreign Policy
An inspired plan, indeed. I mean, those old folk are already getting up at 6am, anyway. No need for the bugle call. And, because of their aversion to technology, we don't need to upgrade our weaponry to any of that digital, GameBoy, interwebs nonsense. In fact, if they just jump out of their tanks, shake their canes, and command the enemy to "get off my lawn", I think half the enemy would just go home. After all, our most-formidable foe, these days, would be the Chinese, and they have great respect for the elderly.
2 years, 1 month ago on Conversation @ http://www.foreignpolicy.com/articles/2012/08/20/how_to_solve_all_of_america_s_problems_in_a_single_step