> ...the company’s upcoming pricing algorithms, which they hinted might be able to more precisely predict what riders might be willing to pay for a ride.
I hate the whole idea of this. If they track you around, maybe realize you order from fancy places on uber eats, then they will raise prices on something that costs them the same. There's something that strikes me as especially awful about automating the "how much is this individual willing to pay." It's like the worst parts of searching for air fare.
Yet another reason to advocate for privacy, so they can't just buy records about you to determine your price sensitivity from the rest of your life.
If everything everyone bought had perfect information on what they're willing to pay, I wonder what markets would look like. Would getting a raise immediately cancel itself out?
Knowing the max someone was willing to pay could help an actor set their prices optimally where there is no competition. Where there is competition, setting price to the max someone is willing to pay could drop overall profits since a competitor would happily undercut. So it does not change the rules of the game.
Companies already price by predicting what people are willing to pay, by theory and experimentation. I wouldn't expect them having perfect information change much other than quicker convergence to the prices they would set anyway.
Discriminatory pricing feels nasty when you're get the short end of the stick but any pricing scheme will have bias. Having a high wage earner pay the same fare for a service as a low wage earner gives a much better deal to the wealthier person. (In Finland traffic tickets are calculated as a percentage of your income)
In many countries you will pay a surcharge if merchants think that you are wealthier since it implies a greater ability to pay. (Bulk discounts are not universal)
The point where a flexible price structure becomes a problem is where price gauging is being practiced to take advantage of people in a bind.
The worst part about price discrimination is that if there are a limited number of players in the market, it feels like, and maybe effectively is, price fixing.
Now, it may not play out as direct collusion, but if only one company engages in it, they won’t be competitive for their wealthier customers, so it doesn’t make much sense. But if both participants in a duopoly do it, you have no options. It wouldn’t be possible to enact price discrimination for something with lots of competition
Isn’t price discrimination embedded in nearly every transaction we engage in, though?
What is the difference between price discrimination between classes of individuals (to your point, business vs leisure travellers), and individuals themselves?
Nearly every pricing guide on this site recommends offering an ‘invoiced’ pricing plan for enterprises for substantially more than the same service on credit card billing. Price discrimination at its finest and, I would argue, a good thing for suppliers to extra more of the benefit they are providing to consumers.
If the price of the Uber ride is higher than you value that ride... just don’t buy it. Otherwise enjoy the value you have extracted from Uber
If you do, you've already experienced this sizing-up. A contractor comes to the house and sees you can afford 2x what they'd normally charge. A mechanic for your Lexus charges N times as much as the same mechanic would for your Toyota, even though they're the same parts and manufacturer.
Everything about modern pricing theory -- from menu design to coupons to sales to promo codes advertised only to specific markets -- is about getting people who can pay more, to pay more, while still making a little bit of money on those can only afford the bare minimum.
A millenium ago when you bought everything haggling in the market, the rich guy was paying 3x as much as everyone else because the vendors knew they could make him. Meanwhile, the impoverished grandmother gets the unsold leftovers for free. (The specifics obviously are made-up, but you get the gist. It's still the same in much of the world today. Foreigners visiting China pay much, much much more than locals.)
This is the same human principle, just data-driven. It's kind of like progressive taxation, too: those who can afford to pay more, do.
Now you may object: Uber doesn't need the money. But it does need to be able to sustain itself long-term. So much like first-class airplane fares allow economy flights to be as cheap as they are, similarly Uber passengers with the ability to pay more are exactly what make it cheap enough for other passengers to afford at all.
First Degree: This type of pricing strategy takes place when businesses can accurately determine what each customer is willing to pay for a specific product or service and selling that good or service for that exact price. (ie car sales)
Second Degree: Companies price products or services differently based on the preferences of various groups of consumers. (ie Costco vs Whole Foods)
Third Degree: Companies price products and services differently based on the unique demographics of subsets of its consumer base, such as students, military personnel, or seniors. (ie flights)
The purpose here is for a company to identify the maximum consumer surplus it can acquire. As commented below, this surplus also changes based on supply/demand. Supply/demand change based on competitive products or substitute products.
That is how the market works even today without Uber and Lyft too. Everyone is trying to figure out the max you are willing to pay for something. It is just that finding that out is expensive and sometimes exceeds the benefits of bigger margins. Some business like Costco on other than totally opt out of the whole guessing game and would rather offer few choices at fixed price.
Willingness to pay more also tells you a lot about the person's need and if the person is willing to pay more it is a signal that the person needs to more. Servicing those needs first is often beneficial for the whole society. For example a person traveling for an important business meeting that will help him earn lot more would be willing to pay more than teenagers going to the mall. A person trying to catch his international flight worth $$$$ might be willing to pay more than someone just going to get a haircut.
Not only this sort of differential pricing makes sense it benefits everyone without hurting others.
Honestly, it's probably for the best. Over the last decade it has become the expectation that - at the tap of a button - a taxi will appear and take you across the city (or three blocks over) for a few bucks. People need to realize that this isn't reality. The entire industry has been subsidized by VCs and desperate drivers working below minimum wage since day 1.
If, after paying drivers fairly, complying with local laws, reaching profitability etc., we find that prices are where most people can still afford to take Ubers everyday - great! If not, well, that's how things have been for ~150 years. Keep urging your city to invest in public transit and bike lanes.
I don't understand why it's a moral imperative that people not take advantage of the VC funding subsidy? The VCs are wealthy interests looking to find a 10-20-100x exit at the end of this. I don't care if the Saudi Royal family places an enormous bet on automation over the next 10 years. Why is it for the best that all the people who use Uber not have that? I just don't understanding cheering that one of the few subsidies that is tricking down is being phased out, and I disagree with the suggestion that any of this is driving toward the end of paying drivers more.
I have had occasion to call a taxi home after public transit has shut down [a decision I made myself knowing consequences].
When I expressed what the general cost was to my [rather cheap] parent who still lives in 1973, he was astounded. "Why are you shocked and horrified? $45 is a good deal for a 1am taxi at that distance. I cannot believe you've suddenly forgotten about inflation. If you want 1973 taxi prices, go back to 1973 or do an uber."
It appears that a latter part of my quip shall become null and void in a near future.
I'm fine with paying taxi prices with uber and lyft experience. The taxi experience was awful. Spotty acceptance of debit cards, racism, half truths from dispatch. They were insulated from innovation for so long
It's poor competition. In cities where there is a free taxi market Uber is just like every other taxi company (so every taxi company has apps for booking, has nice cars, has pre-payment etc).
In cities with medallion systems or other artificial monopolies, you aren't going to get that.
I'm from Romania and a taxi/Uber ride is somewhere between $2 and $5, which is pretty cheap compared with other countries.
I used to ride with Uber and Bolt a lot, however they've been raising pricing during rush hour and I'm not stupid enough to not notice the bill at the end of the ride and these costs add up.
So several months back I stopped taking car rides altogether. I walk a lot, I don't mind walking 3 Km on foot. I ride my bike to and from work, which is actually more efficient than driving a car in this city. And now in winter due to weather I also use public transportation. I also have a driver's license and own my own car.
I'm not worrying about prices set dynamically. People can notice the bill and Uber is not competing just with Lift or taxis, it's competing with walking on foot, with public transport, with owning your own car and if their prices aren't reasonable, they won't survive.
This article’s a couple months old, so it misses what I think is going to be a lot more definitive against Uber/Lyft.
That is, workers are starting to successfully unionize. Both companies have delayed it as long as possible, but it’s going to happen. And when it does, it will either burn more of their cash or up the customer cost.
Pretty crazy with Juul, WeWork, DoorDash, and Uber / Lyft all struggling (or showing their true colors) that all the things they sought to kill are coming back. Taxis, cigarettes, picking up your own food! It's amazing to me that people were having food delivered from a half mile away.
>Pretty crazy with Juul, WeWork, DoorDash, and Uber / Lyft all struggling
Given that the entire value-added of a company like Uber is getting a taxi to you slightly faster it's not surprising at all. Uber didn't make cars cheaper, drivers faster or added productivity in any other way plus they have a gigantic and expensive tech overhead, so it was never at all clear to me how they're supposed to be both competitive and more profitable than a regular bunch of taxi companies.
It's just like movie pass. As long as you have investors throwing money at you you can pretend that you're actually doing something but selling people a dollar for 75 cents isn't a business.
With the food delivery and meal kits and stuff, they were just selling that stuff for less than it costs. I provided thousands of dollars of revenue for Blue Apron style meal kits and food delivery. As soon as they charged market rate for them, I stopped.
If two companies that have been operating at a loss for N years simultaneously stop, is it price collusion?
There are lots of factors here that could drive a decision to raise prices: both went public this year = increased scrutiny, moviepass & wework fiascoes = decreased tolerance for bad business models, driverless experiments have failed.
But it also feels like there's a wink happening.
If the DOJ / courts takeaway is 'yes it's collusion and they're getting slapped with a company-killing fine', it has interesting implications for the ability of unicorns to operate at a loss for long periods.
Effectively banning negative unit economics for large companies would be a new chapter for the startup economy.
This policy has actually been pretty great for me. Ubers that once cost $4-5 started costing $10-$15, so I started walking and taking public transportation more.
Actually ended up getting to places faster than taking Uber, since I didn't end up waiting 10-15 minutes for the Uber to work its way through traffic to me, or the extra 10-15 minutes taking an Uber would entail due to drivers missing turns or getting lost (despite having a phone providing directions right in front of their faces...).
This. Clearly this has to be the stable state for these services. A taxi is naturally free to operate in a way they see fit (finding narrow strategies and routes) while an Uber is constrained by a routing system. If you find a taxi, you can expect to pay a more optimized fare considering market dynamics, while an Uber has to suffer very suboptimal requests.
In cities like Vancouver, taxis seem to spend much less time idling than Ubers in SF.
I'd say, once people stop dumping money into these companies and they can no longer operate at a loss, the real price of a ride/delivery will become clear.
It's a reasonable working assumption that "ride share" prices end up somewhere around where taxi prices are--with the possible exception of places like London where black cabs are somewhat of a premium service relative to minicabs, etc.
When I hail a ride, I say: I’m going from A to B and am willing to pay C (which Uber can recommend to me) for it.
Now if nobody responds, I increase C until they do. This way the drivers know where they are going, how much I’m paying, etc. When a driver “accepts” a ride, I see their vehicle and rating, and get to choose from the people who have accepted.
And on the other end, they bid on my ride. If I offer $20, they might ask $25 instead, and it is up to me to either accept or reject that.
I really want a system where the drivers are happy, the riders are happy, and everything is transparent and open for negotiation.
I'm having trouble articulating my thoughts about this. Here we have 2 companies losing many hundreds of millions of dollars per month, and everyone here is losing their minds that they want to raise their prices. Price discrimination is just the market side of progressive taxation: everyone agrees that the rich should pay more, but not when it comes to cab fares? If you don't like the price, don't pay it: Uber v. Lyft is a false dichotomy anyway and ignores all the other cabbies in the market.
Hopefully this bullshit opens up a new market for digital obfustication services. Pay me $100, I will show you how to save $300/yr in Uber fees by changing your digital appearance.
Or we could just regulate these practices away and save the trouble. Man I would hate having to shop around for a service like that just so I can avoid being vulnerable to price gouging.
In theory if I check both Uber and Lyft the price of one or the other should be lower since they want my business to offset their fixed costs. The price I am willing to pay Is simply the lowest price I can get for the service.
How rich I am has nothing do with it per se.
So when does it turn into price fixing when they both independently figure out how much I am willing to pay and charge the same amount?
Right now they are uncannily good at charging the same amount for the same trip. Maybe the price is already competitive?
> I've noticed this. I can reliably count on Uber/Lyft to price gouge me whenever they get the chance.
Yeah but come on though, the cut the driver has to take, the cost of car maintenance, the cut Uber is entitled to for giving you a reliable service of connecting you to a driver (and co-pool-riders) and making this process smooth -- compare all of that with what a taxi used to cost, it's still pretty cheap in my opinion. Well, at least in the center city where I am (5 dollars yesterday for a ~5 mile ride, not bad).
They’re about 2.5x to 3x what they were when I first started using Lyft, and even shared rides are pricey enough and take long enough that they have no edge over government transportation in most circumstances and I’ll generally call a private cab if I’m calling a cab at all.
These days I prefer to get myself around without either, but if circumstances prevent or make that option look unattractive, I’ll generally favor government transportation over Lyft or Uber and only call a cab from one of them if I’m in a hurry.
Prediction: this is going to lead to an antitrust investigation at some point. In fact, it may present a catch-22 from a pricing algo perspective:
a) the algos don't collude, but simply adjust driver "supply" in particular geos across each other's platforms via surge adjustments until they act like they are colluding; or
b) the algo designers try to make their algos not collude and they inadvertently use data from the other platform that is nonpublic or in a way that can be determined to harm consumer welfare.
Both a) and b) create a situation where every pricing decision by the algorithm - in every city, across every driver/rider interaction - has to be done in a way that is not collusive. All the DoJ has to do is find an anomalous pricing pattern - which isn't hard - and then pin both these companies with a fine and onerous compliance regulations. Ironically enough, this may be what kills them.
One could argue, and I will anecdotally, that these companies have brought a much higher standard of service into an industry renowned for providing terrible (at best) service.
So if the outcome is that the price has fluctuated back to the norm, but the service provided is of a higher quality, then the consumer has won.
What will be interesting to see is what consequences will arise from a corresponding drop in demand when met with the normalisation of prices to the previous mean. Especially given that you can't actively chose between the drivers available to you through these apps i.e. if there's less demand, supply will likely drop to meet demand (drivers don't want to be sitting around all evening, or just doing 1-2 gigs per night), and there's no way for the cream of the crop to come to the surface amongst their competition by way of superior service and hence selective demand / consumers.
Intuitively, maybe it will result in harsher ratings from consumers (expecting better service given higher prices) which, with sufficient accumulation, may take lower quality drivers out of circulation and leave those deemed to be best in the marketplace.
inevitable. After spending the last year or two without a car at all, in part 'cause lyft and uber had started subtly raising prices, I bought a car a few months back.
I mean, I was a little sad, it was really really nice being driven everywhere... but fundamentally, I'm not quite rich enough to pay market-clearing prices to get driven everywhere. My own impression was that for the last few years, softbank has been subsidizing my own luxury rides, which was really nice! but it was also obviously not sustainable.
my own observation all along was that a lot of the price variation was "specials" - it used to be I could count on some discount several times a week. the biggest price increase I experienced, the one that pushed me to buy my own car, was seeing fewer of these.
Interestingly, now that I have a car and only use uber/lyft when drinking or otherwise away from a car, I get more discounts and specials again.
From talking to drivers, it's similar for them; a significant amount of their income consists of specials, for doing X drives in Y time period.
[+] [-] 6gvONxR4sf7o|6 years ago|reply
I hate the whole idea of this. If they track you around, maybe realize you order from fancy places on uber eats, then they will raise prices on something that costs them the same. There's something that strikes me as especially awful about automating the "how much is this individual willing to pay." It's like the worst parts of searching for air fare.
Yet another reason to advocate for privacy, so they can't just buy records about you to determine your price sensitivity from the rest of your life.
If everything everyone bought had perfect information on what they're willing to pay, I wonder what markets would look like. Would getting a raise immediately cancel itself out?
[+] [-] tmerr|6 years ago|reply
Companies already price by predicting what people are willing to pay, by theory and experimentation. I wouldn't expect them having perfect information change much other than quicker convergence to the prices they would set anyway.
[+] [-] blululu|6 years ago|reply
[+] [-] opportune|6 years ago|reply
Now, it may not play out as direct collusion, but if only one company engages in it, they won’t be competitive for their wealthier customers, so it doesn’t make much sense. But if both participants in a duopoly do it, you have no options. It wouldn’t be possible to enact price discrimination for something with lots of competition
[+] [-] mcrae|6 years ago|reply
What is the difference between price discrimination between classes of individuals (to your point, business vs leisure travellers), and individuals themselves?
Nearly every pricing guide on this site recommends offering an ‘invoiced’ pricing plan for enterprises for substantially more than the same service on credit card billing. Price discrimination at its finest and, I would argue, a good thing for suppliers to extra more of the benefit they are providing to consumers.
If the price of the Uber ride is higher than you value that ride... just don’t buy it. Otherwise enjoy the value you have extracted from Uber
[+] [-] trimbo|6 years ago|reply
If you do, you've already experienced this sizing-up. A contractor comes to the house and sees you can afford 2x what they'd normally charge. A mechanic for your Lexus charges N times as much as the same mechanic would for your Toyota, even though they're the same parts and manufacturer.
[+] [-] crazygringo|6 years ago|reply
A millenium ago when you bought everything haggling in the market, the rich guy was paying 3x as much as everyone else because the vendors knew they could make him. Meanwhile, the impoverished grandmother gets the unsold leftovers for free. (The specifics obviously are made-up, but you get the gist. It's still the same in much of the world today. Foreigners visiting China pay much, much much more than locals.)
This is the same human principle, just data-driven. It's kind of like progressive taxation, too: those who can afford to pay more, do.
Now you may object: Uber doesn't need the money. But it does need to be able to sustain itself long-term. So much like first-class airplane fares allow economy flights to be as cheap as they are, similarly Uber passengers with the ability to pay more are exactly what make it cheap enough for other passengers to afford at all.
[+] [-] Johnie|6 years ago|reply
https://www.investopedia.com/ask/answers/042415/what-are-dif...
First Degree: This type of pricing strategy takes place when businesses can accurately determine what each customer is willing to pay for a specific product or service and selling that good or service for that exact price. (ie car sales)
Second Degree: Companies price products or services differently based on the preferences of various groups of consumers. (ie Costco vs Whole Foods)
Third Degree: Companies price products and services differently based on the unique demographics of subsets of its consumer base, such as students, military personnel, or seniors. (ie flights)
The purpose here is for a company to identify the maximum consumer surplus it can acquire. As commented below, this surplus also changes based on supply/demand. Supply/demand change based on competitive products or substitute products.
[+] [-] KorematsuFred|6 years ago|reply
Willingness to pay more also tells you a lot about the person's need and if the person is willing to pay more it is a signal that the person needs to more. Servicing those needs first is often beneficial for the whole society. For example a person traveling for an important business meeting that will help him earn lot more would be willing to pay more than teenagers going to the mall. A person trying to catch his international flight worth $$$$ might be willing to pay more than someone just going to get a haircut.
Not only this sort of differential pricing makes sense it benefits everyone without hurting others.
[+] [-] paxys|6 years ago|reply
If, after paying drivers fairly, complying with local laws, reaching profitability etc., we find that prices are where most people can still afford to take Ubers everyday - great! If not, well, that's how things have been for ~150 years. Keep urging your city to invest in public transit and bike lanes.
[+] [-] tessting|6 years ago|reply
[+] [-] altmind|6 years ago|reply
Uber, or any company of this sort is not magical lifestyle company, its merely an app for a driver and a rider. This is easily replicated.
Uber became a poster child only because the barrier to enter is so high in so many western economies. There is a ton of smaller competition elsewhere.
[+] [-] drdeadringer|6 years ago|reply
When I expressed what the general cost was to my [rather cheap] parent who still lives in 1973, he was astounded. "Why are you shocked and horrified? $45 is a good deal for a 1am taxi at that distance. I cannot believe you've suddenly forgotten about inflation. If you want 1973 taxi prices, go back to 1973 or do an uber."
It appears that a latter part of my quip shall become null and void in a near future.
[+] [-] chadlavi|6 years ago|reply
[+] [-] hdlothia|6 years ago|reply
[+] [-] alkonaut|6 years ago|reply
[+] [-] bad_user|6 years ago|reply
I used to ride with Uber and Bolt a lot, however they've been raising pricing during rush hour and I'm not stupid enough to not notice the bill at the end of the ride and these costs add up.
So several months back I stopped taking car rides altogether. I walk a lot, I don't mind walking 3 Km on foot. I ride my bike to and from work, which is actually more efficient than driving a car in this city. And now in winter due to weather I also use public transportation. I also have a driver's license and own my own car.
I'm not worrying about prices set dynamically. People can notice the bill and Uber is not competing just with Lift or taxis, it's competing with walking on foot, with public transport, with owning your own car and if their prices aren't reasonable, they won't survive.
[+] [-] whiskyant|6 years ago|reply
[+] [-] bransonf|6 years ago|reply
That is, workers are starting to successfully unionize. Both companies have delayed it as long as possible, but it’s going to happen. And when it does, it will either burn more of their cash or up the customer cost.
[+] [-] admn2|6 years ago|reply
[+] [-] Barrin92|6 years ago|reply
Given that the entire value-added of a company like Uber is getting a taxi to you slightly faster it's not surprising at all. Uber didn't make cars cheaper, drivers faster or added productivity in any other way plus they have a gigantic and expensive tech overhead, so it was never at all clear to me how they're supposed to be both competitive and more profitable than a regular bunch of taxi companies.
It's just like movie pass. As long as you have investors throwing money at you you can pretend that you're actually doing something but selling people a dollar for 75 cents isn't a business.
[+] [-] thdrdt|6 years ago|reply
But when time has come to make their own money they will discover it is not so easy as thought.
[+] [-] paggle|6 years ago|reply
[+] [-] luckydata|6 years ago|reply
[+] [-] awinter-py|6 years ago|reply
There are lots of factors here that could drive a decision to raise prices: both went public this year = increased scrutiny, moviepass & wework fiascoes = decreased tolerance for bad business models, driverless experiments have failed.
But it also feels like there's a wink happening.
If the DOJ / courts takeaway is 'yes it's collusion and they're getting slapped with a company-killing fine', it has interesting implications for the ability of unicorns to operate at a loss for long periods.
Effectively banning negative unit economics for large companies would be a new chapter for the startup economy.
[+] [-] gamblor956|6 years ago|reply
Actually ended up getting to places faster than taking Uber, since I didn't end up waiting 10-15 minutes for the Uber to work its way through traffic to me, or the extra 10-15 minutes taking an Uber would entail due to drivers missing turns or getting lost (despite having a phone providing directions right in front of their faces...).
[+] [-] heavyset_go|6 years ago|reply
[+] [-] aabhay|6 years ago|reply
In cities like Vancouver, taxis seem to spend much less time idling than Ubers in SF.
[+] [-] unknown|6 years ago|reply
[deleted]
[+] [-] justforyou|6 years ago|reply
[+] [-] throwaway857384|6 years ago|reply
[+] [-] ghaff|6 years ago|reply
[+] [-] blhack|6 years ago|reply
When I hail a ride, I say: I’m going from A to B and am willing to pay C (which Uber can recommend to me) for it.
Now if nobody responds, I increase C until they do. This way the drivers know where they are going, how much I’m paying, etc. When a driver “accepts” a ride, I see their vehicle and rating, and get to choose from the people who have accepted.
And on the other end, they bid on my ride. If I offer $20, they might ask $25 instead, and it is up to me to either accept or reject that.
I really want a system where the drivers are happy, the riders are happy, and everything is transparent and open for negotiation.
[+] [-] Invictus0|6 years ago|reply
[+] [-] carfacts|6 years ago|reply
Seems like some kind of collusive price signalling announcement to Lyft. Eg, “we’re going to up our prices, here’s your chance to do the same”.
[+] [-] Jedi72|6 years ago|reply
[+] [-] thundergolfer|6 years ago|reply
[+] [-] arielweisberg|6 years ago|reply
How rich I am has nothing do with it per se.
So when does it turn into price fixing when they both independently figure out how much I am willing to pay and charge the same amount?
Right now they are uncannily good at charging the same amount for the same trip. Maybe the price is already competitive?
[+] [-] freyr|6 years ago|reply
[+] [-] pen2l|6 years ago|reply
Yeah but come on though, the cut the driver has to take, the cost of car maintenance, the cut Uber is entitled to for giving you a reliable service of connecting you to a driver (and co-pool-riders) and making this process smooth -- compare all of that with what a taxi used to cost, it's still pretty cheap in my opinion. Well, at least in the center city where I am (5 dollars yesterday for a ~5 mile ride, not bad).
[+] [-] helen___keller|6 years ago|reply
[+] [-] SllX|6 years ago|reply
These days I prefer to get myself around without either, but if circumstances prevent or make that option look unattractive, I’ll generally favor government transportation over Lyft or Uber and only call a cab from one of them if I’m in a hurry.
[+] [-] ETHisso2017|6 years ago|reply
a) the algos don't collude, but simply adjust driver "supply" in particular geos across each other's platforms via surge adjustments until they act like they are colluding; or
b) the algo designers try to make their algos not collude and they inadvertently use data from the other platform that is nonpublic or in a way that can be determined to harm consumer welfare.
Both a) and b) create a situation where every pricing decision by the algorithm - in every city, across every driver/rider interaction - has to be done in a way that is not collusive. All the DoJ has to do is find an anomalous pricing pattern - which isn't hard - and then pin both these companies with a fine and onerous compliance regulations. Ironically enough, this may be what kills them.
[+] [-] taytus|6 years ago|reply
[+] [-] randyrand|6 years ago|reply
[+] [-] zonidjan|6 years ago|reply
[+] [-] cmdshiftf4|6 years ago|reply
So if the outcome is that the price has fluctuated back to the norm, but the service provided is of a higher quality, then the consumer has won.
What will be interesting to see is what consequences will arise from a corresponding drop in demand when met with the normalisation of prices to the previous mean. Especially given that you can't actively chose between the drivers available to you through these apps i.e. if there's less demand, supply will likely drop to meet demand (drivers don't want to be sitting around all evening, or just doing 1-2 gigs per night), and there's no way for the cream of the crop to come to the surface amongst their competition by way of superior service and hence selective demand / consumers.
Intuitively, maybe it will result in harsher ratings from consumers (expecting better service given higher prices) which, with sufficient accumulation, may take lower quality drivers out of circulation and leave those deemed to be best in the marketplace.
[+] [-] boring_twenties|6 years ago|reply
[+] [-] unknown|6 years ago|reply
[deleted]
[+] [-] lsc|6 years ago|reply
I mean, I was a little sad, it was really really nice being driven everywhere... but fundamentally, I'm not quite rich enough to pay market-clearing prices to get driven everywhere. My own impression was that for the last few years, softbank has been subsidizing my own luxury rides, which was really nice! but it was also obviously not sustainable.
my own observation all along was that a lot of the price variation was "specials" - it used to be I could count on some discount several times a week. the biggest price increase I experienced, the one that pushed me to buy my own car, was seeing fewer of these.
Interestingly, now that I have a car and only use uber/lyft when drinking or otherwise away from a car, I get more discounts and specials again.
From talking to drivers, it's similar for them; a significant amount of their income consists of specials, for doing X drives in Y time period.