Uber drivers gang up to cause surge pricing, research says
telegraph.co.uk
telegraph.co.uk
I'm mostly a fan of these non-taxi "taxi" services, but it seems like they are slowly and painfully rediscovering why taxis ended up so regulated in the first place.
So, now we've got an army of drivers who can't drive, don't know where they are going, playing with their phones all day. It makes for an unpleasant experience whether you're on a bike, driving you car, or sometimes just walking across the street.
In contrast, 'ride sharing' drivers seem to have no sense of direction, and are genuinely oblivious to the rules of the road.
In short, when in either type of car, I fear for my life.
While driving, I tend to fear for my life when taxis are around, but whenever I spot an Uber or Lyft car, they seem to behave unremarkably.
My only request is that passengers don't encourage this by blindly rating everyone 5 stars. Take at least two star off for unsafe driving - not stopping at a stop sign, not yielding to pedestrians, not giving enough space while passing a bicyclist and at least one star for not following the rules - driving on the bus lane, double parking in the middle of a busy road, driving too fast on a 25Mph zone, not waiting long enough for the pedestrians to pass safe ...etc.
If the economics don't work out for the drivers, the fare has to go up. By keeping the fare artificially low and pushing drivers to accommodate too many trips Uber and Lyft are ruining the experience for everyone and in doing so are perpetuating the need for more people to use them instead of considering alternate transport modes. This, sooner or later, will ruin it for everyone.
Take it from me, America cannot handle a developing country style traffic. It requires a different set of skills. People here are used to predictable traffic.
All drivers were cordial, polite, had no problem with routing (admittedly, it's pretty simple in Vegas). One driver was a smoker and the car smelled and that was the only negative in 6 rides.
Overall, it's the end-to-end experience. Call up the app, type in a destination, head to the curb. The car shows up about the same time I get there, I hop in, chat a bit on the way, hop out at the destination, rate & tip via the app and go on my way. The seamless experience, so far, makes up for the (so far mild) idiosyncrasies of drivers and cars.
I've personally been driven by awful taxi and awful Uber drivers, though Uber so far has the distinction of being the only one to genuinely scare me driving 3x the speed he should have on a twisty road, with tires screeching the whole way.
There is a bit of a natural selection process to it.
If you're a cab driver, and you keep getting into accidents, you won't be a cab driver for long. If you take no risks and are constantly late, you won't be a cab driver for long. If you have a poor sense of direction, or spacial awareness when driving, you probably won't be a driver for very long.
After decades of this process, most professional cab drivers are just reckless enough to get away with it.
These Uber drivers haven't spent decades going through that process. Everyone's a newbie. The difference this time is that the risk isn't being undertaken by the company, it's being undertaken by the drivers themselves.
Not really. A newbie at being paid to drive, but in many cases, not new to driving. In my area, I can predict to the minute when I'll arrive at my destination, and what route is best at that time of day, even for a 20 mile trip and without software support. That's because I've been driving 24k miles+ annually here for nearly 30 years.
Not to mention, the driver's app has the same real-time mapping features that smart phones have. So they can avoid grid locked areas, accidents, etc. even without years of cab driving experience.
Yes, an experienced cab driver will be a better cab driver, in general, than a new Uber driver. But not enough better to keep the masses away from Uber/Lyft. Cab companies are getting slaughtered, cab drivers are panicking and two-timing or jumping to Uber/Lyft, and this is happening globally.
And I think the disregard for rules applies to a lot of public drivers. The Port Authority buses in Pittsburgh think they own the road.
I recently went on vacation where the only option available was a taxi cab. Within 5 minutes I remembered why Uber and Lyft have become so popular. Our driver was a complete asshole, honking at everyone and almost running down a bicyclist. Plus, the A/C in the van was broken. And because it was a van, you couldn't even roll the windows down. It was a miserable ride.
The worst drivers are cab drivers in the Loop during rush hour who will honk at the slightest provocation, who don't use turn signals, and will suddenly stop in front of you. If Chicago cab drivers are trained, that training certainly isn't evident.
On the other hand, Lyft drivers have stars docked if they exhibit unsafe driving behaviors, and they are deactivated if their rating gets too low (4.6 stars is the threshold I believe).
Many non-casual Lyft drivers actually try not to crash their ratings. https://www.quora.com/Whats-the-real-reason-Uber-and-Lyft-us...
Cabs don't have this feedback loop. Only accidents will get them off the road.
Edit: I speak as a driver and a passenger. I imagine things have gotten worse for bicyclists. Also, I don't use Uber, only Lyft. I've heard Uber drivers are worse because Uber is more liberal with their rating system.
Plus the GPS systems here will take you down these speed bump residential roads and do crazy contortions to drop off on a one-way road.
On the flip side though, when I first moved here a cab was like $20 each way just from like Broadway to Kimball. Now it's...$4.
It seems like a much better system.
Don't get me wrong, I always use Uber or Lyft over a cab. Taxi regulations are often cited as awful. But this particular one is a good one.
Has the city published any traffic impact studies? NYC showed concerned for Uber impact on traffic and made an attempt to get data and it turned into a political kerfuffle with accusations of protecting the taxi industry etc. I don't like the title of this blog post but it points to similar of what you are stating about downtown Chicago:
http://nyc.streetsblog.org/2017/02/27/its-settled-uber-is-ma...
I'm not really familiar with new york's streets, but ours have been over capacity forever and now with uber/lyft there's a lot more single passenger car traffic in the business areas. Much more so than cabs, because getting them is much more convenient than cabs ever were here - calling a cab in chicago is a joke, honestly, and if you weren't in an area they pass by frequently you were out of luck. I feel like more people choose the uber option for short trips that would have been transit in the past. The convenience of it is the model, after all.
You would need Uber/Lyft's help I believe. But I think if you combined the Uber/Lyft data with data that the DOT keeps it would be pretty easy to quantify the impact. I think that was NYC's point as well. But unfortunately the mayor had received money from a taxi lobbying effort which allowed Uber to cry foul and make accusations of protectionism.[1]
One metric used is average travel speed which according to this recent article is down 12% to 8.1 miles compared to 2010[2]
[1] http://www.nytimes.com/2012/07/18/nyregion/de-blasio-reaps-b...
[2] https://www.nytimes.com/2017/03/06/nyregion/uber-ride-hailin...
> It makes for an unpleasant experience whether you're on a bike, driving you car, or sometimes just walking across the street.
How drivers guided by a nav system is worse for streetwalkers than any other drivers? And, from my experience, long-term commercial driving doesn't always make a driver a model road citizen - in fact, in many places taxi drivers are kinda notorious for being less than model co-roaders.
This is where Tesla is going to have an advantage. They're going to start with self-driving, no need to deal with pissed off drivers and other problems that come with a transition. Same thing with their dealerships - they didn't have to deal with the dealer-franchise system.
Those cab drivers can't get starved out of business fast enough as far as I'm concerned.
Last time I was in a cab in Chicago the driver ran a man over in the street and just kept going. When I jumped out to see if the victim was okay the driver yelled to me that I was fare dodging before he sped away....
Chicago has also begotten the most amazingly complicated 3D road diagram in America: https://upload.wikimedia.org/wikipedia/commons/9/98/Chicago_...
Apart from the fact GPSes don't really work on Lower Wacker, so it's hard to nail down the pickup location on the app.
It's been pretty eye opening.
> Which is funnier: tech bros innovating their way to public transit, or bitcoin folks slowly reinventing financial regulation?
- @PlanetOfFinks, https://twitter.com/planetoffinks/status/850848359392870400?...
With Uber/Lyft it's trickier since while you are welcome to not use it, it may have implications which are beyond direct users of the services. Still, I think the effects are relatively small and not disproportional to what you could encounter without them - i.e. how badly you can be burned there? Surely, you can have a bad driver - same could happen with a Taxi. A bad Uber driver could create a bad situation on the road - so can any other bad driver, nothing new here. So marginal costs are pretty low here. Not to defend bad drivers - those should be dealt with appropriately - but the additional "burn" that would be caused is IMHO pretty low.
As for insurance, there are tons of people on the road with bad insurance, at least for Uber as I understand you have something to back it up.
As for assaults and other bad apples, that could have happened with taxi too. I don't believe any company of these proportions could have checks that could 100% prevent such cases. I'm not sure it's possible in even in principle...
Have we kept the same regulations because they work incredibly well? Or because we are complacent.
Uber coming along has been a good reset for the regulations. There were a lot of ineffective and counterproductive regulations in place and I think wiping them out and starting over is a good thing.
Sarasota, FL is an interesting case to study. The traditional taxi companies complained about Uber in the city and rather than fight Uber, the city removed the regulations on taxi companies. So far, I don't think much has really changed.
As for the gaming of surge pricing, I think that's fixable. Uber just needs to think more carefully about driver incentives.
What's the Uber business case?
Is there enough profit in taxi services around the world to justify their valuation and financial losses?
Do they hope to recoup through a future monopoly? Tracking Data? Self-driving vehicle fleets?
Now it seems to be, avoiding regulation for fun & profit.
There are a lot of people with these qualifications.
In front of me. During the ride.
They definitely do this and it happens all the time. I sent my complaint about it to Uber, to only get ignored. The drivers are gaming the system and the customers get hurt. Right now, Uber is still better than taxis where I am, but I tell you the absolute second there is a decent competitor I am switching. I absolutely despise Uber.
It would be so easy to stop this. Prevent someone who turned off their phone prior to a surge, from participating in the surge price for a time window before and after.
Doesn't sound like the Uber I've been reading about. Sad.
Even uneducated people become very intelligent when it comes to gaming the system to their advantage. It is always a cat and rat game between technical adjustments and when people find a way to game the system again.
People learned the phone company would refund any Denied All Knowledge of a long distance call. Call up, get a credit.
Then phone company said you cant DAK calls 2 months in a row: so customers called in every other month.
Then, they eliminated operator handled calls for small bills. Call in, get an IVR, get a credit.
Phone company caught on and limited credits to $7 per month, every other month.
Customers started crediting <$7...
And on and in...cat and mouse.
Then, few realized you only had to pay 91% of the past due balance to not get shut off..
Others finally realized that if your account gets associated with a elected federal official or a PUC complaint you account will never get treated for collections.
--- Another simple one: having to press "0" 3 times to get to an agent on some IVRs..
I have better luck just making indistinct noises. After three "I'm sorry, I didn't get that"s it almost always transfers me to a real person.
You can't have a successful oligopoly when there's no barrier to entry.
I imagine multiple people (heck, many people) can win the game in this period.
So you're priming the surge pump, so to speak, since you know where the ride requests will be anyway.
So I notice your username, and I'm wondering; are you both a developer and an Uber driver? Are you practicing both jobs at a time?
A few weeks ago I took a ride with someone who was trying very hard not to "join the uber mafia". He said that most of the time he also has to turn off his phone, otherwise he gets screwed over.
The reason is that when there are no more drivers, he'll get matched with people on the other side of town. He doesn't get paid for the drive out, and sometimes people still cancel after waiting 20 minutes for an uber to show up after ordering. Even with surge pricing it didn't make financial sense, so he'll turn off his phone too or switch to Lyft during these periods.
This reminds me a lot of the LinkedIn algo hacks that's driving me nuts right now. If you post super long form, cheesy, generic paragraphs of text with no links/visuals - you get massive exposure. The result has been superficial posts filling up my feed talking about who knows what.
Much like the nuisance of a pricing surge on Uber, these algo hacks can be a real pain.
"Separate research at Northeastern University has previously found passengers can game surge pricing with simple tricks such as waiting five minutes or crossing the road."
I know I've waited out twenty minutes or so to bypass the surge or at least dampen the surge to a rate I was comfortable with. Sort of becomes an auction experience at that point.
Cartels is the main danger with unconditional basic income. If you make sure everyone can eat, you create a moral hazard, where the insured are not sensitive to price anymore. Having said that, we already have means-tested welfare and food stamps, and cartels of fruit stores don't spontaneously appear everywhere. However, they may appear in food deserts and other places where there aren't a lot of participants. Competition is the only factor I can think of to combat this. But in some areas with few participants, this collusion can ultimately happen.
And then of course there is this result: https://www.arxiv.org/abs/1201.3798v2
Does anyone here have constructive thoughts on how to overcome this problem? Price controls and collective bargaining via single payer is all I can think of besides competition.
If consumers won't shop around, or make price sensitive decisions, then the market for the good in question becomes price insensitive. But, I think UBI is attractive primarily because it doesn't seek to tell people how to spend their money, or tell them what the right choices are. As an alternative to welfare, it should allow consumer preferences to play a greater part in the market.
Think about patio and his posts in the past about increasing your rates. That's how it happens.
When you have insurance, then the buyer and seller can join forces to raise prices - that's called a moral hazard.
The "problem" that UBI has vs single payer is that it is not creating a command economy, but leveling the playing field in a capitalist one. If you want a single payer, you don't want a UBI, you want communism. If you want UBI, you are OK with market forces, but are using a single lever to attempt to correct for a market failure in the most "libertarian" way possible.
The only way single payer really succeeds is if you curtail consumer choice in order to achieve efficiency in what you buy - the single payer doesn't understand all the possibilities in the market. This is maybe a reasonable thing to do in sub-markets, like prescription medication, but is not such a great idea if you do it to the entire market.
If all buyers buy the same thing naturally, the price will go up, yes, but in the long run, production should also go up. If you just put a price control on it, there will always be a short supply, and too much unmet demand, even if the price for those who do manage to get the good is a great deal.
Communism is more than just "to everyone according to his need". It is also "from everyone according to his ability." And it talks about collective ownership of the means of production, and other stuff. To a great extent, the public stock market is collective ownership of corporations, which is far better than what Marx had in mind.
BUT
This is not about labels. This is about designing systems that work, vs systems that have major issues.
The major issue with UBI is inflation. There is no way around it. Everyone gets X every day. This X is spent into the economy, primarily on necessities. They are not sensitive to price increases because X is indexed to inflation, otherwise what's the point?
So, stores raise prices and people go ahead and pay anyway. And so every sector competes with every other to raise prices before the other sector takes more of the UBI money than they do.
It is a moral hazard.
Now, with single payer systems, the doctor has a choice: accept Medicare, with the prices it offers, or not. It's attractive to accept Medicare because you get a lot of patients who would otherwise not pay you.
This DOES NOT MEAN the consumer can't choose the doctor, school, or anything else. It just means there is collective bargaining for prices.
And btw you benefit from this all the time. Look at Amazon squeezing publishers - stories on HN all the time about this. Or Apple's App Store having rules for developers. Or Google's rules for web publishers, making them make responsive sites. And so on.
Libertarians think "the government" is just one entity. But every organization has a management structure. Eventually we may have decentralized protocols like scuttlebutt etc. that change this paradigm. But for now, we have organizations all over the place and when most consumers are on Facebook, etc. they do in fact squeeze publishers.
UBI is NOT insurance, though, and so it is difficult to argue that a limited income, even if free, creates a moral hazard that would truly cause people to no longer budget for things, any more than a salary makes you price insensitive. The quantity of the UBI seems to be the relevant factor, I guess.
Any UBI plan needs to come with a firm understanding of this dynamic and how to prevent it.
Search for "bridge":
http://www.landvaluetax.org/current-affairs-comment/winston-...
So not to say that these ride share services have moved to remove all these kinds of consumer protections that clearly were quickly dropped and exploited once they were removed due to the state of emergency but to a large extent, I feel like I had the chance to experience the larger forces of gamification that would happen if these protections were removed and circumstances were ripe for profit. Overall I am very happy with the changes ride sharing services have brought to supplement transportation options but there are certainly a lot more of these bumps and kinks to be worked out if these businesses hope to avoid a wave of government regulation.
Still, even with a huge surge, Uber is 1/2 to 1/10th the price of a cab in my city.
This summarizes why the model would continue to work. It's similar to low-cost airlines: most of us hate them, but most of us still use them.
A prime example of this is the airlines. Southwest and Virgin have somehow convinced staff and passengers to be polite to each other, so boarding and other things go smoothly. The same flight for the same price on United or American is a mess of elbowing and passive agressiveness.
Also, would this be mostly BigCo vs SmallCo culture difference? United and American are kinda massive ...
This sounds like a fix to one of my major complaints about Uber. The prices are too low. I like cheap rides, but I also like knowing that the people who are giving me rides (and providing me services, selling me goods, making those goods, etc) are making living wages.
And, to some level - This is collective bargaining. This is precisely what Unionists want, without all of the mess involved in actual unions. The drivers are collectively demanding higher wages, and Uber is responding.
On the other hand: There's a good reason we're seeing this pushback. Uber is a shitty, predatory company, and has relentlessly worked to drive down driver wages well beyond sustainable rates. (It's also a shitty company to it's full time employees, to which I will attest.)
However, drivers do not set the per-minute pricing -- that's the rideshare company's prerogative.
On talking to couple of drivers on a few occasions they confessed that they do this to filter out folks asking for lower mile rides!!
edit: This is obviously not in high uber/lyft density zone like a downtown SF where one can assume most of the rides endup being in the 2 mile radius.
Passenger rating does matter when it comes to how fast you are getting your ride.
I drove Uber for a month or so, and use to love short rides because:
1. I would stay in the region of my choice
2. They would help me reach my bonus # of rides targets
Uber went on a campaign of hiring cabbies. I guess the fact that cabbies congregate and organize completely eluded Uber management.
Though I imagine it wouldn't be hard for Uber to implement some basic security to thwart it.
Also, this practice is illegal as it amounts to price fixing/collision. These are all independent businesses conspiring to raise prices. These aren’t employees of the same company – they are independent contractors which means they are separate businuess entities from each other which means they are committing a crime.
Collusion is a crime and that’s exactly what these separate business entities (who happen to have Uber as a customer) are doing.
EDIT: Full disclosure -- I drive for Lyft part-time. I have not participated in the gaming described in this article.
It makes sense if you think about it: giving people who won’t pay surge prices a ride anyway makes drivers scarcer for those who will pay, raising surge prices even further.
I’m pretty sure that surge pricing outside a narrow range will eventually be made illegal. It makes too many people too angry and they’d rather get on a car waiting list than see a 3x price. You can argue the economics all you like but people are irrational.
They give a share to Uber because Uber is their lead generation. Many businesses give a share of their money to Google because Google brings them business.
An Uber driver can market their own business and keep all the money if they want just like a business could go out and market without using AdWords.
If you are unhappy with the pay Uber drivers make, you are welcome to pay whatever you want. It’s called a tip. Hand the driver cash for whatever amount you think compensates for the “exploitation” you imply (and are enabling by your own admission.) Otherwise, choose another transportation option and the market will respond.
I rarely hear anti-Uber people demand that supermarkets charge more for tomatoes despite those that pick tomatoes working in extremely tough conditions for low pay. I used to drive a taxi for a summer and I know it’s a non-stop hustle and not the best job, but I was at least in an air conditioned car listening to the radio all day and not out in the fields picking fruits and vegetables. It ended up being a low profit pursuit, so I ended up moving on to something else.
I have a hard time feeling sorry for people that do jobs like Uber because they, with some moderate ambition, could improve their lot – they already own a car, they could make deals with local companies that send lots of people to airports, for example. They could work on building an actual business while they pay the bills with their Uber income – just as an example. Still other drivers might start a mobile car wash service for other Uber drivers, etc. There are plenty of ways to evolve past depending on Uber as one’s sole income. But most people aren’t ambitious at all – they just want to just do what they’re told and collect a check no matter how meager. Other drivers use Uber for extra income or it’s a transitional job.
Any driver thinking they will make a career out of Uber is a fool. If they don’t like the conditions, they should be working hard and to create something of their own. It doesn’t take much money, but it takes ambition.
It also takes sufficient life-situation stability, good health, and so on. Shaming people for lacking "ambition" is neither universally appropriate nor universally effective.
EDIT: I didn't originally upvote the parent comment, but I now have. I think there's a very interesting debate to be had when we consider individuals as economic actors. Disadvantaging individual participants in the "gig economy" too aggressively (e.g. by prosecuting Uber drivers for collusion) forces us towards solutions like unionization by dividing us into privileged capital and downtrodden labor. I'd like to talk more about we might empower individual actors (e.g. by improving the social "safety net" and making the job market more fluid).
It's my understanding that a lot of people operate in a similar manner.