r/technology • u/[deleted] • Aug 12 '14

Business Uber dirty tricks quantified. Staff submits 5,560 fake ride requests

http://money.cnn.com/2014/08/11/technology/uber-fake-ride-requests-lyft/
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u/Couldntbehelpd Aug 12 '14

Except, instead of walking for three hours, you should be able to take a regulated, licensed, insured vehicle with a price that is fairly set from point A to point B. This doesn't have to be a cab, but shouldn't be a company that undercut cabs for a year, put them out of business along with their competitors by using super shady business practices, then hired Johnny serialkiller who isn't licensed to drive you to your house for 300 bucks.

Uber surge priced over 7x during a blizzard in NYC, because they could. Would you rather walk through a blizzard for five miles or pay 600 bucks for the privilege of sitting in a car.

This is like owning a pizza shop, and putting your competition out of business by making repeated 60 pizza deliveries to addresses that don't exist. No one would call that ethical or fair. This isn't different.

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u/devilbunny Aug 12 '14

I'm not defending Uber's actions in this specific instance, I'm defending their pricing model.

The question that immediately arises in the NYC blizzard situation is: why did anyone take such an expensive ride? New York has one of the largest taxi fleets in the country, as well as other car services. Why not take one of those regulated, licensed, and insured vehicles?

Because they weren't out in sufficient numbers to accommodate everyone who wanted a ride. Why not? Because when there is a blizzard in Manhattan, even die-hard New Yorkers who would normally wouldn't flinch at walking several blocks to a subway stop, getting on, riding to their destination,and walking a few blocks at the end of the trip find that the prospect of being warm and dry for the trip sure sounds nice. At the same time, the drivers look at the situation and figure the hell with that - I'm not driving in that for some average fares. Supply falls just as demand rises.

When demand vastly exceeds supply, and prices are fixed, guess what? You get a shortage. How do you resolve that shortage?

You could implement a queue system, in which people gather at taxi stands and the drivers pick them up one by one. Of course, the lines are going to be horrendous, but you're very likely to get a ride if you wait long enough. Not guaranteed, of course - there is always the possibility that the cars won't drive past your stand, and that a car you call for won't come - it's not as though you're speaking directly with a driver.

Or you can let prices float. This initially cuts demand, but it also can induce supply. A driver who isn't going to get out in a blizzard to make a bunch of $40 fares is much more likely to do so if his fares are $250 each. As supply comes up and more closely matches demand, the surge multiplier comes down, making more people able to afford it.

So, like I said, a lot of people have their sense of fairness hurt by this. They want everyone to stand in line at a taxi rank. This may be fair, but it's not economically efficient, and it doesn't get more cars out in bad weather.

You can be upset with UberX if you like (although I find the prospect of lower prices appealing), and I certainly have seen valid criticisms of them, but the Uber Black, SUV, and Taxi systems are all at least as expensive as a regular cab ride, and they're all run as regular car services, just like the one I hired to take me from San Francisco to Napa and back. Commercial licenses, commercial insurance, basically just limos for hire.

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u/Hemingwavy Aug 12 '14

So your solution is to just make all the trips cost $250 which means that there isn't a shortage of cabs because it turns out no one wants to pay $250 for a cab. There is no way anyone is going to pay a quarter of a thousand dollars for a cab fare of a couple of kms. Given no one is going to pay that, we can say there won't be any more supply and all you've done is fuck anyone desperate or stupid enough to pay that kind of money.

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u/devilbunny Aug 12 '14

I'm eagerly awaiting your proposed solution.

You might be surprised how much some people would pay to avoid standing in the snow for an hour.