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Comment by sida | Hacker News Reader

Maybe eventually uber needs to allow drivers to set prices for themselves, with a large enough market it should proxy surge pricing?

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Yeah, that'd theoretically work. But I wonder how it would go in practice with the limited information of each driver. Perhaps if they provided drivers with statistics (average offering price, bottom 10% offering price, ride volume over time, peak areas etc) then it would work. Interesting proposition.

They could do it dutch auction style. Suppose there are five drivers and three rides. The drivers bid per-mile rates of $.75, $1, $1.25, $1.50 and $1.75. The rides go to the three lowest bidding drivers and they all get $1.25, i.e. the highest rate of the drivers who get rides.

It gives everyone the incentive to bid their actual threshold past which they wouldn't want the ride, because if you bid too high you don't get any rides, but if you bid lower you may still get paid more than that unless bidding that low was actually necessary to get the ride. And at any given time all the riders pay the same rate as each other.

>They could do it dutch auction style. Suppose there are five drivers and three rides. The drivers bid per-mile rates of $.75, $1, $1.25, $1.50 and $1.75. The rides go to the three lowest bidding drivers and they all get $1.25, i.e. the highest rate of the drivers who get rides.

The problem with all these variables is that the more "preferences" you introduce into marketplace to matching, the longer your pickup time will be.

The 2nd most frustrating change is going to be the increase in pickup times because drivers will now optimize for rides that are exclusively in city limits.

You can address things like that with predictive matching. You don't actually wait until there are three rides before matching anybody, you just look at the data for this timeslot and expect that statistically there will be three rides this hour, use that rate based on the drivers who are on, and assign the nearest of the three lowest bidding drivers as they come. If a fourth ride appears that hour then you immediately raise the rate to the fourth lowest bidding driver starting with that ride, and so on, and next time have more data and make a better prediction.

This is actually really clever. Maybe Uber can set a base rate of $0.75 per mile and then the driver can elect to increase it at a 25c per mile interval so that the supply is grouped together

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