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Uber drivers have been complaining that the gap between the fare a rider pays and what the driver receives is getting wider. After months of unsatisfying answers, Uber Technologies Inc. is providing an explanation: It's charging some passengers more because it needs the extra cash.
The company detailed for the first time in an interview with Bloomberg a new pricing system that's been in testing for months in certain cities. On Friday, Uber acknowledged to drivers the discrepancy between their compensation and what riders pay. The new fare system is called "route-based pricing," and it charges customers based on what it predicts they're willing to pay. It's a break from the past, when Uber calculated fares using a combination of mileage, time and multipliers based on geographic demand.
Daniel Graf, Uber's head of product, said the company applies machine-learning techniques to estimate how much groups of customers are willing to shell out for a ride. Uber calculates riders' propensity for paying a higher price for a particular route at a certain time of day. For instance, someone traveling from a wealthy neighborhood to another tony spot might be asked to pay more than another person heading to a poorer part of town, even if demand, traffic and distance are the same.
Source: Bloomberg
(Score: 3, Insightful) by AthanasiusKircher on Sunday May 21 2017, @02:05PM (11 children)
Touchy much? Why the personal attack? Please cite the place in my post where I even said I didn't "like what's being done here." I was pointing out ramifications of what may happen. At no point did I actually condemn any of these things (I actually referred to possibilities as "fun stuff"!), though it seems like you're quite defensive about those possibilities -- maybe you sense there might actually be something unfair here, causing the overreaction?
Anyhow, now that you actually bring up my personal view, I don't necessarily have a problem with "personalized pricing," which is likely to benefit someone like me. I'm not prone to go out and "shop" for lots of expensive goods on a whim. I don't "impulse buy." I often carefully comparison shop. I'm rarely swayed by "deals," especially at higher price points. Anyone who is doing a psychological profile of me and using it to set a price for me is likely going to offer me a BETTER deal than average.
So, from a purely selfish position, I don't much have an issue with your "market." However, I do have a problem with INJUSTICE. And one fundamental axiom of fairness for me (based in the work of John Rawls) is that society should only encourage inequalities that help all members of the society [wikipedia.org]. Rich people can get rich and have better service and what-not: I don't have any problem with that... as LONG as the overall improvements in the efficiencies of the system don't end up making life worse for the poorest members.
And in some cases, flexible pricing may actually improve life for the poorer folks, for example if lower pricing actually made it easier and cheaper for them to travel. But, absent regulation or "incentives" from the government, I have little faith that most companies will actually choose to do so voluntarily. They'll likely still keep offering the same price to poor people and just charge more to the rich. So, it won't become easier for poor people to travel -- the net effect is likely that lower fares could cause them to provide worse service to the poor.
You can choose not to believe in that axiom of fairness, but I personally want to live in a society that believes that.
(Score: 2) by turgid on Sunday May 21 2017, @02:27PM
Someone probably thought you were a Commie or something.
I refuse to engage in a battle of wits with an unarmed opponent [wikipedia.org].
(Score: 0) by Anonymous Coward on Sunday May 21 2017, @02:31PM (7 children)
Personal attack?! What are you talking about???
Your lack of faith in humanity contradicts your faith in government; there is nothing magical about government—it does not transcend humanity, and may in fact elicit the worst in humanity, as the foundational principle of government is coercion rather than agreement.
Fairness is voluntary trade. That's it.
If interaction is not voluntary, then it is not fair. (Please keep in mind that there are at least 2 parties to every interaction; you cannot just consider one party.)
(Score: 2) by AthanasiusKircher on Sunday May 21 2017, @03:03PM (5 children)
I provided some historical context that I thought was mildly amusing regarding the word "taxi," as well as some commentary on where such trends might lead.
Your post (assuming you're the same AC) turned this into "the fact that you don't like what's being done here..." even though I wasn't necessarily arguing against new pricing trends. Just throwing out some thoughts. Maybe "attack" was too strong a word, but you definitely took an abstract discussion and turned it into a personal confrontation.
I don't have blind faith in government. Obviously there's a lot of bad government and bad regulation. I do know that government in democratic societies is at least nominally tasked with representing the interests of the public. I don't think it's reasonable to say that boards of large corporations are generally constructed with that aim.
(Score: 0) by Anonymous Coward on Sunday May 21 2017, @03:14PM (4 children)
They are largely creatures of Big Government—defined by and created for the governmental elite, each using the other for nefarious purposes.
While a government is nominally tasked with representing the interests of the public, a corporation is tasked with a much more rigorous, disciplined, useful, and difficult task: Representing the interests of shareholders, specifically creating value for them.
(Score: 2) by number11 on Sunday May 21 2017, @03:33PM
At the expense of everyone else. That's "useful" to the owners, but may hurt everyone else.
(Score: 2) by AthanasiusKircher on Sunday May 21 2017, @03:50PM (2 children)
The history of corporations is complex, I'll grant you that. And yes, there's been a lot of collusion between government and corporations. The modern corporation (not the "chartered" quasi-governmental ones before the mid-18th century) was originally created partly to serve the public interest, though. Although today corporations are criticized as being a liability "shield," litigation without the legal status of a corporation at earlier times in history made things like lawsuits cumbersome if not impossible -- imagine trying to sue thousands of stockholders in a corporation all named as individual parties. The push for more widespread allowance of "incorporated" status was thus at least partly driven by public demand to allow more reasonable mechanisms to hold them accountable. In turn, corporations demanded limited liability, which screwed up corporate law for all time.
But I absolutely agree with you that collusion between government and corporations over the years has done a lot of evil. On the other hand, I still don't see this as an argument that one should trust corporations OVER government to do better for the public. There's also no evidence that businesses "behaved better" before widespread incorporation existed.
If you're really an Adam Smith "invisible hand" type, you should be very suspicious of corporations. What you said goes directly against Smith's view of corporations. Instead Smith himself in Wealth of Nations warned that:
In other words, corporations are nominally representing the stockholders, but really it's a way of putting a lot of power in the hands of executives who likely act in their own interests more than in the stockholders'. Anyhow, once again, even if corporations represent shareholders, I still don't know why we should trust them to act in the interest of the general public good.
(Score: 0) by Anonymous Coward on Sunday May 21 2017, @07:39PM (1 child)
A corporation is just something that happens when someone pays the government a fee for access to a special legal system. Any problem with corporations is 100% a problem with the government and its laws.
(Score: 0) by Anonymous Coward on Sunday May 21 2017, @11:34PM
> 100% a problem with the government and its laws.
Let me guess, you are missing cone cells and only have black & white vision...
(Score: 0) by Anonymous Coward on Sunday May 21 2017, @08:50PM
(Score: 1, Offtopic) by IndigoFreak on Sunday May 21 2017, @02:40PM (1 child)
Where's the personal attack?
(Score: 2) by AthanasiusKircher on Sunday May 21 2017, @03:04PM
Mea culpa. "Attack" was too strong a word. "Confrontational" is really what I meant.