Uber Starts Charging What It Thinks You're Willing To Pay (bloomberg.com) 235
An anonymous reader quotes a report from Motherboard: Uber drivers have been complaining that the gap between the fare a rider pays and what the driver receives is getting wider. After months of unsatisfying answers, Uber is providing an explanation: It's charging some passengers more because it needs the extra cash. The company detailed for the first time in an interview with Bloomberg a new pricing system that's been in testing for months in certain cities. On Friday, Uber acknowledged to drivers the discrepancy between their compensation and what riders pay. The new fare system is called "route-based pricing," and it charges customers based on what it predicts they're willing to pay. It's a break from the past, when Uber calculated fares using a combination of mileage, time and multipliers based on geographic demand. Daniel Graf, Uber's head of product, said the company applies machine-learning techniques to estimate how much groups of customers are willing to shell out for a ride. Uber calculates riders' propensity for paying a higher price for a particular route at a certain time of day. For instance, someone traveling from a wealthy neighborhood to another tony spot might be asked to pay more than another person heading to a poorer part of town, even if demand, traffic and distance are the same.
Don't think Uber will be alone with this (Score:4, Interesting)
Other companies will adopt this as well. They will charge you what you are willing to pay them. You won't even be safe outside of the online world, in retail shops the price tags will adopt depending on the time of day and maybe even, combined with face tracking, who is around.
Re:Don't think Uber will be alone with this (Score:5, Insightful)
This is why taxi companies have to post rates and those rates are based on a combination of time and odometer, at least in many jurisdictions it's mandatory for them to do this.
Uber is once again demonstrating why we have passenger livery laws, and in this case it might well be the first time that flouting it has a strong effect that's really felt by the customer.
Re:Don't think Uber will be alone with this (Score:5, Insightful)
the gap between the fare a rider pays and what the driver receives is getting wider.
Uber's profit margin is none of the driver's business. Don't get me wrong, I'm not defending Uber. I think they're scumbags and you shouldn't work for them. And if you don't think Uber is paying you enough, then that's another good reason to not work for them.
Re:Don't think Uber will be alone with this (Score:4, Informative)
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Re:Don't think Uber will be alone with this (Score:4, Insightful)
That's not true that no one has batted an eye, and it's also not entirely true that airlines have been doing exactly this either.
If I understand Uber and its ilk, the amount of time between booking a ride and taking the ride is short, minutes to hours, to the point that it's essentially a single act. By contrast, the amount of time between booking an airline seat and taking the flight is usually days or weeks, and sometimes even months, and since airlines themselves are financially tied to the aircraft (either leasing or outright ownership) they are paying for the the vehicle in addition to the staffing and everything else; the airline takes on the financial risk. Fares start low-ish to attract travelers, rise as time to the flight shortens, then may plummet reasonably close to the flight to try to fill-in seats, then skyrocket in the last couple of hours to profit off of demand for last-minute bookings before getting even cheaper as standby passengers are booked.
I do not care for how airlines price fares, but since airlines are the entity bearing the financial burden of the entire aspect of the flight then I am less annoyed by it. Uber doesn't own the cars, doesn't pay salaries to the drivers whether they're driving or not. If Uber is pushing the financial aspect of the risk to the drivers then it shouldn't claim one thing to the passenger and another thing to the driver.
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It's older than that.
Some airlines used cookies in the late '90s or 2000, and charged a higher price when you returned. You could be offered the original again by deleting the cookies.
hawk
Re:Don't think Uber will be alone with this (Score:4, Interesting)
Don't get me wrong, I'm not defending Uber.
You should defend them. They have every right to charge what the market will bear. They have every right to pay their employees what the market will bear. They are a business, not a charity.
If you don't like what they charge, then use Lyft, or take a taxi, or walk. If you don't like what they pay, then go work elsewhere.
Disclaimer: I use Lyft. I hate Uber. But although I don't like what they charge, I will defend their right to charge it (although, unlike Voltaire, not to the death).
Re:Don't think Uber will be alone with this (Score:4, Informative)
Yeah, but the thing here is that while Uber's profit margin is really their own business, and they can charge what they like, they actually have a negative profit margin: the drivers are paid *more* than what the company is taking in from riders (at least, that's what I keep reading). That's not sustainable. But that's between Uber and their silly investors.
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They have a negative profit margin not because they pay their drivers more (in the US), but because they sink a boatload of cash into buying hookers, booze, and drugs for politicians. They sunk 10 mil on trying to get austin to overturn their background check in a referendum and failed, so they went up the chain and spent an unknown amount on the texas legislature for a statewide law that trumps the local ordinance. Clever they are. The current rate structure is just the beginning. Once they have driven eve
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Yeah, but honestly, how likely is it they could run everyone else out of business? The core of their business is "ride-sharing", which really means a cellphone app which tracks drivers and matches them up with riders. It's not that technically difficult, and other companies exist doing the same thing, namely Lyft. Other cab companies have actually made similar stuff now in response, Anyone with a little capital could make a similar app; it's just not that hard. I don't see how Uber could possibly corne
Re:Don't think Uber will be alone with this (Score:5, Insightful)
It's really weird to me that people think that the fact that it's their right has anything to do with this discussion. The question isn't if it's their right, it's if they're exercising their rights in a way people are free to disagree with. And saying it's none of our business is a curious moot position to take: they volunteered the information. It's like somebody saying something really stupid, and you present a counter argument, and people say, "Yeah but, they have the right to say whatever they want." Yes they do. What does that have to do with breaking down what they said?
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The problem with this analogy is that it happens IRL way too often to make it sound wrong :-(
Re:Don't think Uber will be alone with this (Score:5, Insightful)
They have every right to charge what the market will bear.
The customer has the right to know how much it will cost before the transaction occurs.
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The customer has the right to know how much it will cost before the transaction occurs.
Taxis don't do that. Why should Uber? At least Uber gives you an estimate, but the final price can depend on traffic delays. I don't use Uber, but Lyft estimates are usually accurate.
Re: Don't think Uber will be alone with this (Score:5, Informative)
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That gives the customer a rate, but not a transaction cost. Customers don't have a right to a specific transaction cost unless it's quoted up front as a fixed fee.
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It's not like that is even remotely unique to this industry.
I always fill up at the gas station, and I pay whatever the price comes to. The yogurt shop charges by weight after I pour and add toppings. My employer pays me for all the time I use to complete a task. This happens with or without an estimate; so long as the final charge is reasonable, people usually don't complain.
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What they are doing here is charging you $2.07 if you are in jeans and driving a honda at 3pm but $2.75 if it's midnight and they know the other stations are closed. And $3.75 if you are driving a nice car at midnight.
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BTW isn't Amazon doing something like this too? Don't they show different prices based on your personal shopping history?
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The customer has the right to know how much it will cost before the transaction occurs.
No. They have the choice to use such a service or not though. Rights have nothing to do with it.
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You should defend them.
Why?
They have every right to charge what the market will bear. They have every right to pay their employees what the market will bear. They are a business, not a charity.
They are contributing to the failure of the market by participating in the race to the bottom. Defending them is an idiot's move.
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"That worked really well for Venezuela."
Did it now, it worked really well in many countries, I didn't know about Venezuela.
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Uber's profit margin is none of the driver's business. Don't get me wrong, I'm not defending Uber. I think they're scumbags and you shouldn't work for them. And if you don't think Uber is paying you enough, then that's another good reason to not work for them.
It absolutely is the drivers' and the passengers' business. It's the drivers' business because Uber proposed a deal where each party gets a certain percentage of the pay. It's my business because it means my money doesn't go towards paying for the service, but towards financing the greedy parasites.
In addition, any system that wants to charge me more than someone else for the exact same service pisses me off in a major way. To the extent where I say "shove it up your ****" and use a different service, ev
Re: Don't think Uber will be alone with this (Score:3)
"Uber's profit margin is none of the driver's business. Don't get me wrong, I'm not defending Uber. I think they're scumbags and you shouldn't work for them. And if you don't think Uber is paying you enough, then that's another good reason to not work for them."
But the issue is that Uber is partly able to undercut Taxis because they claim that theuy aren't a taxi company and don't employ drivers and merely take a percentage commission for facilitating a transaction between a rider and an independant driver.
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Uber is once again demonstrating why we have passenger livery laws
Not quite. When Uber sets a centralised price based on some algorithm it is still deterministic. The reason we have the laws we do is to stop individual drivers from attempting to screw individual passengers when they believe they have some upper hand. This price may be variable to extract money from passengers but it is far from the reason why the laws were introduced.
Dickering or haggling... (Score:2)
Just as has been occurring for the biggest part of human existence. The idea of a set price and or posted price tags is relatively new to civilization.
https://www.quora.com/When-dur... [quora.com]
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So is penicillin. What's your point? Innovations are new, and therefore we should undo them whenever they are in the way of corporate profits?
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It's such a fucking pain in the arse when in a third world country, you HAVE to bargain for every single purchase; or get charged the "white man" price -- ten times or more than the local price. Uber is bringing this shit back -- but when I bargain for a bejak in Indonesia; I know how the system works. I also expect I won't get the same price as a local. Uber is exploiting the trust people that an automated system will be fair; so very likely white people will be paying more on average than coloured in many
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You do have a point. The corporate world has concentrated production and ownership into far too few hands. When the production of sustenance level items, e.g. food was in the hands of thousands of small producers things were much more robust and stable. I buy much of my food from local producers and the open farmers market, often bartering my labor and skills in the computer industry for goods. I also realize that isn't an option for most people...
Re:Don't think Uber will be alone with this (Score:5, Funny)
Other companies will adopt this as well. They will charge you what you are willing to pay them.
This is terrible. Someday, even flea markets and third world village produce stalls will start negotiating prices based on what they think you are willing to pay. We will look back to 2017 as the end of innocence, when Uber became the first company in history to discover price discrimination.
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Someday, even flea markets and third world village produce stalls will start negotiating prices based on what they think you are willing to pay.
Where do you see that Uber lets you negotiate?
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Right at that button that the consumer has the choice not to press.
Even take it or leave it offers are still a negotiation.
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Seriously, all you had to do was stop typing after you said "the friction costs of bargaining." and this would have been considered a meaningful contribution to the conversation, but instead you had to go on to reveal your racist & xenophobic side instead and alienate most of your readers.
It's sad I almost agreed with you until that point. I just recently visited India and I found it interesting
Re:Don't think Uber will be alone with this (Score:4, Funny)
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Taxis have done this for years. It's also highly illegal. Yet another reason to not invest in Uber.
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"Other companies will adopt this as well"
Are you kidding!? Barring government regulation, that's they way companies run since forever: pay the producer as little as you can get with and then ask the buyer as much as you can come with.
The only difference is how clever are they at that, but the basic fact remains.
Uber was alone before... (Score:2)
...they are just joining the rest of the world's pricing strategy:
* airlines set ticket prices largely based on willingness to pay, which is why a short flight between Calgary and Ft.McMurray in Canada full of oil workers costs more than a flight from Canada to Europe or Asia.
* hotels price their rooms based not only on demand but where their customers are visiting from...Americans often get better Vegas deals than Canadians and Europeans, and room prices go up during conventions so the "special convention
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It's not legal to charge different, individual people a different price.
Are you sure? That would make "ladies' night" where women are charged less than men illegal, as well as hairdressers who charge a man less for a basic hair cut than a woman with the same hair length/volume.
Not to say anything about medical services, where uninsured pay a lot more for the same services than someone with insurance, even when the insurance company pays nothing and it's all out of pocket.
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It's not legal to charge different, individual people a different price.
Are you sure? That would make "ladies' night" where women are charged less than men illegal, as well as hairdressers who charge a man less for a basic hair cut than a woman with the same hair length/volume.
It's obvious that there is a difference between something that is generally agreed upon by both parties, and a pricing system that when applied at it's most efficient manner is one that if you were to ask the customer for any more, they would tell you to fuck off.
Ladies night, by charging less for women, is designed to make good will from ladies, and more men would be likely to attend, hoping to get laid by some drunk woman.
Anyone going to a hairdresser will understand that almost all women's haircuts
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It's not legal to charge different, individual people a different price.
Hogwash. In the United States it is illegal to discriminate against an enumerated list of protected classes [wikipedia.org], including race, color, religion, national origin, etc. Discrimination is generally legal on any other basis. Some of these class protections are only for employment. For instance, age discrimination is illegal in hiring, but allowed in pricing (hence "senior discounts" and "student discounts").
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Discrimination is generally legal on any other basis. Some of these class protections are only for employment. For instance, age discrimination is illegal in hiring, but allowed in pricing (hence "senior discounts" and "student discounts").
How can we accept that kind of discrimination as a modern society? Poor people from poor neighborhoods should have the right to pay as much as Silicon Valley startup bros for their Uber rides.
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It's not legal to charge different, individual people a different price.
Of course it is. The poor are not a protected class. You are [theoretically] protected from discrimination on the basis of your religion, gender, race, national origin, age, pregnancy, or indeed your genetic makeup. But you are not protected from discrimination based on your social class, income, money in the bank, or any other financial basis. That is completely legal.
What's not legal is for a taxi service to charge different prices to different customers, or to employ surge pricing. Uber's argument is tha
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Wait until they get your browsing or shopping history. Then they will know who has money to spend.
Their app already knows what phone you are using. So they could charge more if you have an expensive phone. They wouldn't be the first company to do that.
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They can only do so because Google and Apple are siding with app developers to the detriment of their real customers. Don't know why (perhaps app-revenue/payment intermediation)
Ideally, an app should only get what personal / calendar / address-book / call /message history / microphone / photo information I specify. I shouldn't have to hack my phone, or buy a second phone, to do this.
Wait until true personal agency reaches computing - when your device has both the integrity and the smarts to divine and execu
Tracks (Score:2)
Re: Tracks (Score:2, Insightful)
Why should you have to do this?
Time to support your LOCAL taxi companies again. These guys are proven to be crooks over and over?
Donate your money to a good cause if you have too much.
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This!
When I Ubered from the Orlando, FL airport, the ride was wicked expensive because to service the airport, there were special requirements (black limo or upscale SUVs only) and the driver said they had to pay $1000 per year for the privilege of picking up fares there.
The return trip to the airport was half the cost, and that driver explained the strategy for my next trip. Get your airport ride to the nearest restaurant, and then call a normal Uber from there to wherever you are actually headed.
I thought
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Plenty of airports have a well known off-airport location for ride-sharing pickups. Sometimes these are walkable from the airport, but otherwise a short ride on a shuttle or public bus. If I am flying into an unfamiliar airport, I do some googling ahead of time so I know what to do when I get there.
"How much will that be..?" (Score:5, Insightful)
"...How much you got!?"
(I think they call this a shake down)
Real Life (Score:2)
"...How much you got!?"
(I think they call this a shake down)
Yes and no. Uber does not have a monopoly, and people can comparison shop to Lyft or even a taxi or public transit.
If and when they get caught charging more based on phone battery life, then they should be hanged. Until then, remember that price discrimination on its face isn't actually irrational.
People have different utility functions. A ride is worth more to one person than to another. And the fact that Uber is not a monopoly means that customers can comparison shop, at least for now. (This will become m
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They don't even need to ask. All they need to do is somehow link up your phone and account with your Google, Facebook, and Amazon cookies and they can get all of that info they want.
Regulated Taxis (Score:3, Insightful)
So now do you understand why taxi companies are regulated?
Re:Regulated Taxis (Score:5, Insightful)
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No one really had a problem with taxis being regulated. The problem was that both the number of companies and the number of taxis were severely limited. This led to a low supply and high prices along with no motive to give better service. Until ride sharing companies moved in the taxis around here were still using credit card imprinters and would often refuse service or in the worst case, kick people out partway if they found out they weren't using cash.
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The problem was that both the number of companies and the number of taxis were severely limited. This led to a low supply and high prices along with no motive to give better service.
The part that you're overlooking is that roads are a scarce resource in cities, so we really don't want a large number of hire cars circling adding to congestion. I'd say the second half of the argument is also false, you don't have to look hard to find a lot of complaints about drivers for either of the Internet taxi dispatchers.
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The issue wasn't so much the complaint worthy service by some drivers, but rather the antiquated systems that caused it. Using credit card imprinters to deal with cards until 2014 or thereabouts was ridiculous.
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What you taxicab socialists are overlooking is that any ride service where the supply is able to accommodate any demand is inherently cheaper than any ride service that limits the number of providers.
Not only do I Uber, but on occasion to Walmart. May your heads explode.
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However that only works if the increased prices push people to public transit instead of to privately owned cars.
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The wonders of supply and demand is such that if you're willing to pay, you can even get driven in a classic Cadillac . . .
A couple of weeks ago, wealthy folks had an Elvis themed wedding, and contacted our club to drive the guests and Elvi (yes, "Elvis" has a plural in Las Vegas, and we need it . . .) from the private terinal to the Casino.
It wasn't cheap; they paid $250/car--and, once we pointed it out, the $50 surcharge on our classic car insurance for commercial use . . .
Interestingly they got the price
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So now do you understand why taxi companies are regulated?
Yes. To create artificial scarcity and generate a lucrative market for medallions and permits.
Re:Regulated Taxis (Score:4, Insightful)
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You've argued in two comments about road scarcity meaning "we don't want a large number of taxis on the road."
That's idiotic -- non-taxi vehicles outnumber taxis by a huge number nearly everywhere, probably even in Manhattan. Doubling the number of taxis would be a single digit increase in the number of total vehicles in most places.
There's a sound argument that convenient and easily obtainable hired car service would be a meaningful reduction in the number of private vehicles used. Driving a private car
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Dahon (Score:3)
Dahon makes these wonderful fold-up bikes you can take on mass transit and not look like an asshole (though you will look like a bear riding a bicycle).
When you make pricing unpredictable, customers are going to stay away in droves. As will I.
"But you're taking your life in your hands by biking in Boston"
It's not any worse than say, Providence or Warwick.
--
BMO
What is a Tony spot? (Score:3)
Tony the tiger??? Is it great? Tigers have stripes, not spots.
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"Tony" is an upscale word for "upscale "
Next step... (Score:5, Insightful)
...Uber starts paying its drivers what it thinks they're willing to accept.
Re:Next step... (Score:4, Informative)
I think that they've been doing that for a while.
Well what is it you want? (Score:2)
Better example: (Score:5, Interesting)
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Someone travelling from a poor neighborhood to a fast food joint when the work shift starts will be asked to pay more than someone going from movie theater to starbucks, because the former might not have any other transportation and can be squeezed dry.
Not really.
This is Uber admitting they're losing money and charging people more because they think that people use Uber because of an irrational hatred of the taxi industry... erm... I mean loyalty, rather than the fact Uber was the lowest priced option.
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Someone travelling from a poor neighborhood to a fast food joint when the work shift starts will be asked to pay more than someone going from movie theater to starbucks, because the former might not have any other transportation and can be squeezed dry.
Unlikely, the person in the poor neighbourhood is probably catching public transit (or biking, or walking).
If anything they're going to going to have trouble catching an Uber at all since the drivers will be making more money shuffling wealthier people back and forth from starbucks.
excuse the sarcasm (Score:4, Insightful)
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isn't the purpose of Taxi regulations is to make sure that the price is consistent regardless of time of day or distance?
That leads to artificial shortages when demand is high, such as rush hour on a cold and rainy day. If the price is allowed to rise, more drivers will be incentivized to provide rides instead of staying home out of the rain.
With fixed prices, you pay more than the market price when demand is low. You pay less than the market price when demand is high, but you spend a lot longer standing in the rain waiting for an available cab.
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Uber hasn't ever worked on a pricing structure like that. Why the sarcasm?
The problem with a fixed prices is it leads to shortages and surplussed as the demand fluctuates.
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No, you missed the point *entirely*.
The purpose of taxi regulation in US cities has *always* been about being an entry to barrier to protect the cab companies, and to protect the from competition from one another.
Everything else that it does is a side issue.
Roughly, the extra costs to the taxi company are worthwhile, as the higher costs keep potential entrants out, allowing participation in cartel/oligopoly profits.
On top of that, the incumbents are not subject to the usual cheating by other cartel members
Huh - this is different (Score:5, Insightful)
This change, however, strikes a nerve for me personally. It's a combination of Big Brotherly data accumulation and usage against people, along with a heaping helping of, "Screw you, rich boy," shakedown.
If this is the way data collection is going, and how it'll be used, then THIS kind of abuse of people's wallets may finally be what wakes up the average Joe as to why privacy still matters.
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I honest didn't give a damn about all the weird stuff Uber and its CEO have been doing to various parties. All politics, embarrassments, etc. - don't care... As long as 1) the ride is cheaper, and 2) the drivers are good, that's fine.
Lets stop pretending you gave a shit about point number 2.
I've been in enough Ubers to realise that most of them drive worse than 3rd world taxi drivers. People only went with Uber because it was cheaper. If it is no longer cheaper, they will no longer have customers.
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This change, however, strikes a nerve for me personally. It's a combination of Big Brotherly data accumulation and usage against people, along with a heaping helping of, "Screw you, rich boy," shakedown.
If this is the way data collection is going, and how it'll be used, then THIS kind of abuse of people's wallets may finally be what wakes up the average Joe as to why privacy still matters.
Word, Bro. Fuck over poor people? Awesome, that's capitalism. Suck it up, snowflake. But fuck over the rich bros? Man, that should be a wakeup call to everybody.
What would be the point then? (Score:2)
Drivers Take the Heat (Score:3)
Uber - as a job, naaaa (Score:2, Troll)
I kind of lilked Uber when I was too sick to drive myself to the doctor's appointments. The drivers were usually pretty willing to give me an extra hand. Then I noticed something on my home LAN reports. A lot of connections to a HTTPS address I didn't recognize from my phone. A look up of the domain name came back with a private registration, and the IP addresses were allocated to large ISPs without sub-allocations. The certificate details weren't too helpful either.
So I started deleting apps from my phone.
Uber knows *you* as well as the neighborhoods (Score:2)
The whole story many not be even here (Score:2)
This week I had too training events where I wanted to arrive on time and without worries, and I got Uber - the prices were more expensive than they should be.
From that and this notice, I think Uber is also penalising more frequent users, from them to subsidise lower prices to attract new users.
Is it a good strategy? I often used Uber because the prices were attractive; if suddenly they are the double, I will start using more my car.
As
Another reason never to use Uber (Score:2)
This is just another one of the many reasons I'll avoid Uber. Unless I'm desperate, I won't use them, and unfortunately, if I'm desperate their algorithms will probably fuck me extra hard in my time of need. Thanks, Uber.
Die, Uber, die. (That just means "The Uber, the", as Sideshow Bob will attest.)
Racial and economic profiling? (Score:2)
So under this premise Uber could charge more for someone going from Apple's Campus in Cupertino than they would in East Palo Alto for going the same time/distance?
We're nolonger in an age where a ride is based on time and distance, but on your economic standing.
What about charging more for "dangerous parts of the city"? $5 more for picking someone up in Oakland rather than Atherton (home of the CEOs)?
Or you could crank it up $10 more if you were going to the airport (bonus if Uber could determine when your
peace of mind (Score:5, Insightful)
Back to the robber baron times.
People think they are smarter than their grandparents when actually they are so much more dumb that they don't even notice it.
You see, there is a reason for regulations, for fixed fares, for trade union wages and all that "evil government" stuff. The reason is called peace of mind.
Sure I can go through life negotiating every small deal, always checking all the prices, always on the edge making sure nobody takes advantages of me while I try to use every opportunity there is. What a stressful way to live your life!
When you travel the same way multiple times, you learn very fast how much the taxi rate is. If you travel in the same city a lot, you can quickly make reasonable estimates. Because of fixed prices. I can decide to take the taxi to the airport tomorrow, estimating what it will cost me and deciding the saved time is worth it. But when prices change all the time depending on a hundred variables half of which I don't even know, then there is no such calmness. I need to check all the different driving services and compare, and just before booking, not the evening before. Then I need to make sure none of the surge charging or other modifiers changes the price at the last minute.
Why should I fuck my brain like that to maybe save a few bucks? Why should the driver go to work in the morning with not the slightest clue how much he'll earn today? The slavery to market mechanics sucks the souls out of all the human beings involved in the transaction. You can do business like that when you have machine-to-machine trading, but us humans, for us all of this dealing is not an end in itself, it is just a tiny part of the life we live, and the mental burden, the uncertainty and unpleasant surprises have an effect far stronger than the monetary optimisation effect.
The "gig economy" is not a new invention. Millions of people throughout the ages lived their lives like that. Short, miserable and poor lives. Nobody ever became rich with gigs. It's just a trick to swindle us out of the health care, unemployment and other social security systems that older generations fought and died for to establish. Everyone pushing this misery ought to be ashamed and beg for forgiveness at the graves of their grand- and grand-grand-parents.
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"choice", hehehe.
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Too many hills. We'll all have to move to the East Bay where it's flatter and cheapper, but hotter and boring.
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so.. it has the desired effect - budget concious customers hold off until the price drops, and those who really need the items right now can still get them albeit at a higher cost. Would you rather they keep the price constant and run out and then no one can get the item at any price for a while?
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(Like hell I'm paying an extra 25% for a DOCSIS 3.0 modem.)
This is exactly how markets are supposed to work. If there is a temporary shortage, the price should go up so that people with an urgent need can get what they want, while people (like you) that are willing to wait get lower prices.
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This is exactly how markets are supposed to work. If there is a temporary shortage, the price should go up so that people with an urgent need can get what they want, while people (like you) that are willing to wait get lower prices.
I will give you a nice example how I saw the market working. A dozen years ago, the drivers driving petrol trucks in Britain went on strike. Huge queues at all petrol stations. One owner of a petrol station decided to take advantage of the situation and doubled his prices. People had to pay, he made a mint.
Then the strike was over. His petrol station was absolutely empty. It took six weeks until he was bankrupt. And that's how it should work. Gouge me and there will retribution.
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Huge queues at all petrol stations. One owner of a petrol station decided to take advantage of the situation and doubled his prices.
There are plenty of people who would much rather pay double than waste an hour in a queue. These people would be grateful that someone had the sense to price to market.
People had to pay, he made a mint.
Except that no one HAD to pay. They could continue to wait in the queues at the other petrol stations. They were just offered the additional option of paying with money rather than time. Since he "made a mint" it is clear that many people preferred than option.
Then the strike was over. His petrol station was absolutely empty. It took six weeks until he was bankrupt.
Of course you just made all this up. In the absence of price controls, ALL of
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If the "shortage" was a lean inventory failing to predict demand, then it could just as well be artificial. If it was an industry-wide shortage and not just ordering late from a supplier, it makes sense.
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The flaw is that Uber is no different than traditional taxis except it uses a mobile app. Its like 90s patents all over again, tack "on a computer" or "through the internet" to any mundane idea and suddenly its 'novel'.
Its more like me starting a company for the sky sharing market, where I sell seats on planes that ignore all FAA rules and use highways for landing strips. Don't regulate me bro, I'm innovating.
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Uber is no different than traditional taxis
Their drivers can't just pick random people up off the street. They have to be dispatched through the app. That makes them more like a limo service than taxi service. Any hired car service but a taxi would be an apt comparison, but I don't see the taxi connection.