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Anil Dash's article discusses how the internet has enabled and encouraged the formation of what he calls "Fake Markets." These Fake Markets have the appearance of a more ordinary free market, but the choices allowed therein are either illusory or can be arbitrarily shuffled or removed without knowledge of any of the parties to the transaction. He traces the changes in business plans of companies such as Uber, Google, and eBay to show how they have evolved from creating new markets to strangling them.
But unlike competitive sellers on eBay, Uber drivers can't set their prices. In fact, prices can be (and regularly have been) changed unilaterally by Uber. And passengers can't make informed choices about selecting a driver: The algorithm by which a passenger and driver are matched is opaque—to both the passenger and driver. In fact, as Data & Society's research has shown, Uber has at times deliberately misrepresented the market of available cars by showing "ghost" cars to users in the Uber app.
It seems this "market" has some awfully weird traits.
- Consumers can't trust the information they're being provided to make a purchasing decision.
- A single opaque algorithm defines which buyers are matched with which sellers.
- Sellers have no control over their own pricing or profit margins.
- Regulators see the genuine short-term consumer benefit but don't realize the long-term harms that can arise.
This is, by any reasonable definition, no market at all. One might even call Uber a "Fake Market". Yet, by carefully describing drivers in their system as "entrepreneurs" and appropriating the language of true markets, Uber has been welcomed by communities and policymakers as if they were creating a new marketplace. That has serious implications for policy, regulation and even civil rights. For example, we can sincerely laud Uber for making it easier for African American passengers to reliably hail a car when they need a ride, but if persistent patterns of bias from drivers arise again in the Uber era, we'll have a harder time regulating those abuses because Uber doesn't usually follow the same policies as licensed taxis.
(Score: 1, Insightful) by Anonymous Coward on Monday February 27 2017, @02:58PM (1 child)
A "true" market is decentralized, or at least has its foundation in an inherently decentralized system.
Uber represents the same kind of command-and-control structure around which a government is founded; the difference is that a government is an organization which is violently imposed, and which is usually celebrated as The One True Way as per humanity's ancient, uncivilized, tribal cultural predilections.
Someone should build a peer-to-peer "Uber", whose parameters (such as price) are set solely due to the voluntary participation of every party. It is from voluntary agreement within decentralized participation that Truth of the needs and wants of the market (i.e., of society) can emerge into consciousness and thereby be satisfied.
(Score: 0) by Anonymous Coward on Tuesday February 28 2017, @06:24AM
Uber resembles a pyramid scheme to me in many ways, albeit done legally They don't make money. They sell the promise of making money. Those who started Uber make money. The early "investors" might make money, those who come later are likely to lose money.
In some countries the fares don't even cover the amount the drivers are making (that's not competition that's anticompetitive dumping). It's definitely easier to provide a better service for cheaper fares if you're not expected to make money and are subsidized in the order of billions.
https://www.bloomberg.com/news/articles/2016-12-20/uber-s-loss-exceeds-800-million-in-third-quarter-on-1-7-billion-in-net-revenue [bloomberg.com]
https://www.bloomberg.com/news/articles/2016-08-25/uber-loses-at-least-1-2-billion-in-first-half-of-2016 [bloomberg.com]