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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: 4, Interesting) by vux984 on Monday February 27 2017, @05:01PM (3 children)
You seem to have missed the point.
That's irrelevant to the definition of markets.
That's fundamental to the definition of a market. Remember the context here is uber as a market unto itself, NOT uber as single participant in larger market. Uber is a player in the transportation market. Nobody disputes this. However Uber, DESPITE ITS OWN CLAIMS TO CONTRARY IS NOT a creating marketplace.
Contrast uber with ebay... ebay is obviously in the larger market of "places you can order things you want sent to you". But ebay (unlike Uber) is ALSO a market unto itself. There are buyers and sellers WITHIN ebay, that each set their own prices, and buyers and sellers are matched in pretty transparent way. Indeed the differences are so stark that uber drivers are trying (and succeeding) at getting themselves classes as employees -- while it would be absurd on its face for an ebay sellers to claim they are employed by ebay.
However uber goes around talking about its business model as if it were creating a market place like ebay... its not. Its not even close.
Incorrect. Sellers know ahead of time what their effort would bring.
The fact that sellers do have the choice not to participate at all just means that they aren't slaves. It doesn't mean that they control their own pricing or profit margins within the "so-called" uber market.
In the case of Uber, the legacy markets tend to have really bad problems like government-enforced oligopolies. And the "short term improvement in user experience" will still be an improvement in user experience in the long term.
That can hardly be taken as a foregone conclusion.
(Score: 1) by khallow on Monday February 27 2017, @05:18PM (2 children)
That's fundamental to the definition of a market.
You won't find such a definition. Instead, there is a standard terms for markets where some participants have better informational access to the market than others: information asymmetry [wikipedia.org]. And really, why is this opacity even that opaque? Uber is doing this to make profit. That strongly constrains what their algorithms will do in matching drivers and riders.
Incorrect. Sellers know ahead of time what their effort would bring.
The fact that sellers do have the choice not to participate at all just means that they aren't slaves. It doesn't mean that they control their own pricing or profit margins within the "so-called" uber market.
I notice you don't say anything that actually disagrees with my point. Let us also recall here that if there aren't enough drivers collectively to cover demand (and generate profit for Uber, of course), Uber raises the prices to encourage more drivers to join. So this choice to participate or not has consequences beyond just whether or not a driver bothers with Uber. For example, you can chose to drive for Uber only when the prices offered are high. There's a far greater control over profit margins than the article claims.
In the case of Uber, the legacy markets tend to have really bad problems like government-enforced oligopolies. And the "short term improvement in user experience" will still be an improvement in user experience in the long term.
That can hardly be taken as a foregone conclusion.
What other conclusion is rational here? Uber isn't going to revert to the old systems for book taxis. The "short term improvement" is here to stay.
(Score: 2) by https on Monday February 27 2017, @08:20PM (1 child)
The traditional thing to do when you've been schooled is to gracefully say, "your kung fu is better than mine" and sit down.
Offended and laughing about it.
(Score: 1) by khallow on Monday February 27 2017, @10:10PM
The traditional thing to do when you've been schooled is to gracefully say, "your kung fu is better than mine" and sit down.
You could have always just not said a thing. That's traditional too for someone in your circumstances.