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from the always-read-the-fine-print dept.
Submitted via IRC for SoyCow1937
Uber is fighting a proposed class-action lawsuit that says it secretly over charges riders and under pays drivers. In its defense, the ride-hailing service claims that nobody is being defrauded in its "upfront" rider fare pricing model.
The fares charged to riders don't have to match up with the fares paid to drivers, Uber said, because that's what a driver's "agreement" allows.
"Plaintiff's allegations are premised on the notion that, once Uber implemented Upfront Pricing for riders, it was required under the terms of the Agreement to change how the Fare was calculated for Drivers," Uber said (PDF) in a recent court filing seeking to have the class-action tossed. "This conclusion rests on a misinterpretation of the Agreement."
The suit claims that, when a rider uses Uber's app to hail a ride, the fare the app immediately shows the passenger is based on a slower and longer route compared to the one displayed to the driver. The rider pays the higher fee, and the driver's commission is paid from the cheaper, faster route, according to the lawsuit.
Uber claims the disparity between rider and driver fares "was hardly a secret."
"Drivers," Uber told a federal judge, "could have simply asked a User how much he or she paid for the trip to learn of any discrepancy."
(Score: 4, Informative) by Thexalon on Wednesday September 20 2017, @06:56PM
Any highly competitive industry where you have lots of sellers and lots of buyers. That's a major piece of how capitalism is supposed to work. The cost of producing widgets is generally supposed to determine the supply curve of the classic supply-demand price diagram. Some examples of industries that behave like that are smaller-scale farmers (e.g. my neighbor's vegetable stand, one of many in my area) local pizza joints, and home services like plumbers. Such businesses will generally be profitable enough to keep the proprietor in business if they're good at it, but they aren't going to be raking in millions either. Part of the brilliance of this system is that it encourages each competitor to find ways of becoming more efficient, which will up their profits until their competitors figure out how to do the same thing, at which point the price of the widget goes down, which helps everybody trying to buy it.
The reason you're likely confused is that many if not most industries these days are not highly competitive markets but instead have only a few sellers (oligopoly) or a few buyers (oligopsony). In the more extreme cases, there's only 1 buyer or seller, or a monopoly / monopsony. Once you've gotten to that point, the system breaks down, because now the competitive pressure to keep the prices down are much more limited. For example, if you have 3 sellers, they could compete viciously with each other trying to increase how many widgets they sell, or they could tacitly agree to keep the price artificially high, and it's a matter of game theory which one each seller will try to pull off. Similar things start happening when you only have a few buyers, e.g. agricultural distributors, except they tacitly agree to keep the price artificially low.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.