Uber and Lyft Suggest the Days of Cheap Rides Could Be Over • Hacker News Board

Re: Uber and Lyft Suggest the Days of Cheap Rides Could Be Over

#61

Post by sokoloff » Sat, Dec 14, 2019, 6:59 PM UTC

imustbeevil wrote: post #47

6gvONxR4sf7o wrote: post #31

> ...the company’s upcoming pricing algorithms, which they hinted might be able to more precisely predict what riders might be willing to pay for a ride. I hate the whole idea of this. If they track you around, maybe realize you order from fancy places on uber eats, then they will raise prices on something that costs them the same. There's something that strikes me as especially awful about automating the "how much i…

From an efficient market standpoint, a good balancing measure would be if consumers knew exactly what it cost Uber/Lyft to provide the service. That way even if they charge you more for being rich, you can make an informed decision whether or not you want them profiting as much as they are from you. A competitor might even find an advantage by providing that information. For example, if a car service told you exactly…

Why would I care how they divided their money between the platform, the driver, and the company holiday party at HQ?

I don't need nor even want to know how much Dunkin Donuts pays to make a donut or Exxon to buy, refine, and truck a gallon of gasoline to me.

Re: Uber and Lyft Suggest the Days of Cheap Rides Could Be Over

#62

Post by esotericn » Sat, Dec 14, 2019, 6:59 PM UTC

save_ferris wrote: post #45

6gvONxR4sf7o wrote: post #31

> ...the company’s upcoming pricing algorithms, which they hinted might be able to more precisely predict what riders might be willing to pay for a ride. I hate the whole idea of this. If they track you around, maybe realize you order from fancy places on uber eats, then they will raise prices on something that costs them the same. There's something that strikes me as especially awful about automating the "how much i…

Couldn’t this technically qualify as discrimination? I vaguely remember reading about how one of the big dating apps increased prices with a user’s age, but had to revert the policy because it amounted to age discrimination. I would hope income qualifies for the same protection, but maybe not.

Yes, it is discrimination.

I believe that you're asking whether it's legal. Also yes.

Re: Uber and Lyft Suggest the Days of Cheap Rides Could Be Over

#63

Post by blululu » Sat, Dec 14, 2019, 7:01 PM UTC

6gvONxR4sf7o wrote: post #31

> ...the company’s upcoming pricing algorithms, which they hinted might be able to more precisely predict what riders might be willing to pay for a ride. I hate the whole idea of this. If they track you around, maybe realize you order from fancy places on uber eats, then they will raise prices on something that costs them the same. There's something that strikes me as especially awful about automating the "how much i…

Discriminatory pricing feels nasty when you're get the short end of the stick but any pricing scheme will have bias. Having a high wage earner pay the same fare for a service as a low wage earner gives a much better deal to the wealthier person. (In Finland traffic tickets are calculated as a percentage of your income) In many countries you will pay a surcharge if merchants think that you are wealthier since it implies a greater ability to pay. (Bulk discounts are not universal) The point where a flexible price structure becomes a problem is where price gauging is being practiced to take advantage of people in a bind.

Re: Uber and Lyft Suggest the Days of Cheap Rides Could Be Over

#64

Post by neffy » Sat, Dec 14, 2019, 7:03 PM UTC

windexh8er wrote: post #34

Rideshare can be profitable for everyone just like Craigslist is. The problem is that Uber and Lyft decided they were large enterprise with a SMB profit model. You could gut 80% of either and if all you had left was drivers making good wages and the service fees for using the app to support the backend you'd be sitting in a lucrative spot. Yet both companies jumped in way too far and way too early. R&D at Uber hasn't…

Don't know why you're getting downvoted - this is exactly the correct analysis - the only missing part of the jigsaw is the pension crisis that will get triggered, when the investors in that sector don't get the returns they've been promised.

Re: Uber and Lyft Suggest the Days of Cheap Rides Could Be Over

#65

Post by formercoder » Sat, Dec 14, 2019, 7:03 PM UTC

heavyset_go wrote: post #13

rasengan wrote: post #3

This is untrue. Without a doubt, with autonomous vehicles, efficient energy usage, storage and harvest via non eco damaging sources like solar power, the cost of rides will get cheaper.

Costs don't dictate prices.

They do for commodities, which transportation in this case generally is.

Re: Uber and Lyft Suggest the Days of Cheap Rides Could Be Over

#66

Post by mcrae » Sat, Dec 14, 2019, 7:04 PM UTC

6gvONxR4sf7o wrote: post #31

> ...the company’s upcoming pricing algorithms, which they hinted might be able to more precisely predict what riders might be willing to pay for a ride. I hate the whole idea of this. If they track you around, maybe realize you order from fancy places on uber eats, then they will raise prices on something that costs them the same. There's something that strikes me as especially awful about automating the "how much i…

Isn’t price discrimination embedded in nearly every transaction we engage in, though?

What is the difference between price discrimination between classes of individuals (to your point, business vs leisure travellers), and individuals themselves?

Nearly every pricing guide on this site recommends offering an ‘invoiced’ pricing plan for enterprises for substantially more than the same service on credit card billing. Price discrimination at its finest and, I would argue, a good thing for suppliers to extra more of the benefit they are providing to consumers.

If the price of the Uber ride is higher than you value that ride... just don’t buy it. Otherwise enjoy the value you have extracted from Uber

Re: Uber and Lyft Suggest the Days of Cheap Rides Could Be Over

#67

Post by pb7 » Sat, Dec 14, 2019, 7:05 PM UTC

OnlineGladiator wrote: post #14

pen2l wrote: post #10

Earlier quoted context omitted.

> I've noticed this. I can reliably count on Uber/Lyft to price gouge me whenever they get the chance. Yeah but come on though, the cut the driver has to take, the cost of car maintenance, the cut Uber is entitled to for giving you a reliable service of connecting you to a driver (and co-pool-riders) and making this process smooth -- compare all of that with what a taxi used to cost, it's still pretty cheap in my opi…

Why do you assume that cost isn't being subsidized? Uber and Lyft are both still hemorrhaging money. I'm willing to bet the real cost is at least twice what you mentioned. Yesterday it cost me $30 to go 5 miles via Uber, and I chose that over Lyft's $40. Not a busy time of day so no price surging. This is in San Francisco for a frame of reference.

I've noticed significantly higher prices starting about ~6 months back to the point that is has actually driven me to go fewer places. It being rainy season in San Francisco has also pushed prices up to $40 or more for a ~3 mile drive some evenings. I actually canceled plans when an Uber Pool was $36 and Lyft even more than that just a few days ago. It's just not worth paying $70+ round trip to grab a drink. I'm willing to bet drivers will see some loss in revenue as a result of higher prices but that's just my opinion.

Re: Uber and Lyft Suggest the Days of Cheap Rides Could Be Over

#68

Post by ghaff » Sat, Dec 14, 2019, 7:06 PM UTC

sokoloff wrote: post #49

ghaff wrote: post #36

Earlier quoted context omitted.

I don't necessarily disagree although I might argue, for example, that maybe Uber drivers are willing to take a smaller cut in exchange for the flexibility they have. But you make a good argument in general that there's certainly little reason to think that Uber rides should be significantly cheaper than cab rides are given a sustainable profitable business.

Uber/Lyft offer an option for someone who is already carrying the fixed costs of owning a depreciating vehicle to come into the market part-time and do some driving for income. They also don't have to commit to set hours. These should have the effect of increasing the supply of drivers (not to the full extent of all ride-share drivers, of course). They also don't have to front the capital cost of a medallion. Ride sh…

>already carrying the fixed costs of owning a depreciating vehicle

Except depreciation and other costs are pretty heavily a function of miles rather than time. (Especially outside of the snow belt where the number of winters plays a big role in salt damage.)

>They also don't have to front the capital cost of a medallion.

That's true but how many places is that a big factor?

We can argue the details and you're right that it's hard to compare dynamic pricing to long-term negotiated fixed pricing.

But I'm not really making a case for exactly where pricing/costs will end up assuming sustainable ride-share businesses. I'm just saying that taxi fares in most markets are probably a reasonable benchmark whether or not ride-share on average settles a bit higher or a bit lower.

Re: Uber and Lyft Suggest the Days of Cheap Rides Could Be Over

#69

Post by tmerr » Sat, Dec 14, 2019, 7:08 PM UTC

6gvONxR4sf7o wrote: post #31

> ...the company’s upcoming pricing algorithms, which they hinted might be able to more precisely predict what riders might be willing to pay for a ride. I hate the whole idea of this. If they track you around, maybe realize you order from fancy places on uber eats, then they will raise prices on something that costs them the same. There's something that strikes me as especially awful about automating the "how much i…

Knowing the max someone was willing to pay could help an actor set their prices optimally where there is no competition. Where there is competition, setting price to the max someone is willing to pay could drop overall profits since a competitor would happily undercut. So it does not change the rules of the game.

Companies already price by predicting what people are willing to pay, by theory and experimentation. I wouldn't expect them having perfect information change much other than quicker convergence to the prices they would set anyway.

Re: Uber and Lyft Suggest the Days of Cheap Rides Could Be Over

#70

Post by lawlessquestion » Sat, Dec 14, 2019, 7:08 PM UTC

sokoloff wrote: post #61

imustbeevil wrote: post #47

Earlier quoted context omitted.

From an efficient market standpoint, a good balancing measure would be if consumers knew exactly what it cost Uber/Lyft to provide the service. That way even if they charge you more for being rich, you can make an informed decision whether or not you want them profiting as much as they are from you. A competitor might even find an advantage by providing that information. For example, if a car service told you exactly…

Why would I care how they divided their money between the platform, the driver, and the company holiday party at HQ? I don't need nor even want to know how much Dunkin Donuts pays to make a donut or Exxon to buy, refine, and truck a gallon of gasoline to me.

Dunkin Donuts and Exxon provide all of the land, buildings, vehicles and materials their employees use to conduct business and turn a profit. Uber and Lyft not so much