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

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

#311

Post by mpweiher »

ikeboy wrote: post #305
mpweiher wrote: post #303

Earlier quoted context omitted.

> And I've addressed the deterrence issue at length No you haven't. You've just asserted a random formula, without any supporting evidence. > just asserting that my model is wrong without explaining why won't cut it. “That which can be asserted without evidence can be dismissed without evidence.” (Christopher Hitchens). You haven't provided any evidence for you "model" (=random formula), so there is no reason to dema…

>However, multiple people actually have provided that evidence and explained in great detail why your idea and formula is wrong. This is false. The only comment that actually purported to respond said there's an issue with an error rate in applying the fine. This is a minor problem, nowhere close to justifying a massive differential across all income levels. >So if you want to figure out why you are wrong, which you…

> economically sound ... economic rationale

A country is not an economy. An economy serves society, not the other way around.

> yet continue to cite "punishment" as a justification.

Deterrence is one of the components of and reasons for punishment:

https://plato.stanford.edu/entries/legal-punishment/

https://www.upcounsel.com/legal-def-punishment

https://en.wikipedia.org/wiki/Punishment

...and the reasons I give very much apply to "deterrence": if committing this crime/misdemeanour will cost me 6 minutes of my life, iff I get caught, I am not deterred. At all. If it costs me a month, I probably am.

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

#312

Post by luckycharms810 »

umvi wrote: post #271
luckycharms810 wrote: post #172

Earlier quoted context omitted.

I think it might help to flip the argument on its head. If you are a low income person struggling to make ends meet - should you have to forego a meal or two ? Is it fair if a richer person does not have to do the same ? All things considered I’d bet you the higher wealth person still has the less impactful fine.

It's not like speeding tickets are inevitable. I've been driving for over 17 years and I've never been pulled over once (knock on wood). But sure, I don't mind proportional speeding tickets (I never get them), but I think it's a slippery slope of socialism where you start thinking everything should have proportional costs. Why should rich and poor both pay $3 for a gallon milk? Shouldn't the rich pay $30 for a gallon…

People make mistakes and exhibit wreckless behavior every once in a while. Unlike milk, the value of a ticket is not set by markets. It is a financial instrument used to discourage behavior. It's really not too dissimilar to a tax. We already have all kinds of progressive taxes - this really isn't much different.

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

#313

Post by ikeboy »

mpweiher wrote: post #311
ikeboy wrote: post #305

Earlier quoted context omitted.

>However, multiple people actually have provided that evidence and explained in great detail why your idea and formula is wrong. This is false. The only comment that actually purported to respond said there's an issue with an error rate in applying the fine. This is a minor problem, nowhere close to justifying a massive differential across all income levels. >So if you want to figure out why you are wrong, which you…

> economically sound ... economic rationale A country is not an economy. An economy serves society, not the other way around. > yet continue to cite "punishment" as a justification. Deterrence is one of the components of and reasons for punishment: https://plato.stanford.edu/entries/legal-punishment/ https://www.upcounsel.com/legal-def-punishment https://en.wikipedia.org/wiki/Punishment ...and the reasons I give very…

You wrote above

>The purpose of a speeding ticket is to (a) punish and (b) deter.

You've yet to give any justification of "punishment" in this context outside of deterrence, and you've explicitly claimed that punishment is distinct from the deterrence effect. Linking to various definitions of punishment is just silly.

>A country is not an economy. An economy serves society, not the other way around.

Since apparently Wikipedia links are sufficient to make points: https://en.wikipedia.org/wiki/Law_and_economics

>...and the reasons I give very much apply to "deterrence": if committing this crime/misdemeanour will cost me 6 minutes of my life, iff I get caught, I am not deterred. At all. If it costs me a month, I probably am.

If the goal is maximizing deterrence, then as above, just set a million dollar fine for everyone. You claimed that would be "disproportionate" above but gave no reason why that's more important than establishing a deterrence effect.

Again, a constant fine establishes a constant deterrence effect. This will not mean that the same percentage of people of any group will end up commiting the crime, both because their initial probability of doing it may differ and because their desires to do it may differ.

You've yet to respond to my point that demonstrates that fines will either be set too high or too high under such a system.

Here's a paper with 300 citations that lays out largely the same model I did and which you dismissed as not supported by evidence: https://www.jstor.org/stable/725557?seq=1

They actually add the enforcement cost of administering the fine, which makes sense but doesn't significantly change the conclusion.

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

#314

Post by john-radio »

ikeboy wrote: post #278
john-radio wrote: post #276

Earlier quoted context omitted.

Oh, I see what you're saying. Then no, taxes like this are not pigovian if pigovian means (wiki:) to "correct an undesirable or inefficient market outcome, and [to do so] by being set equal to the social cost of the negative externalities". Again, that goal is impossible with speeding tickets. The "negative externality" in this case is literally that someone dies. Someone (a lot of someones) lose their kid, their lif…

Pigovian taxes are applied to mortal situations all the time. The most famous example is probably a carbon tax. >The point of the tax is not to "correct the undesirable outcome" but rather to avert it as much as possible using reasonable techniques. If you want to avert it as much as possible, set a million dollar fine for everyone. Why is that unreasonable in your view? If you don't think that would be a good idea,…

Well, I don't have a million dollars, so I wouldn't be able to pay that fine. It does not make sense to try to implement an unsupportable system.

I did not say a good objective was to avert people from speeding "as much as possible" (or I would simply destroy all cars). I said "as much as possible using reasonable techniques." I am not trying to revolutionize the field of public policy economics, here; I am just arguing against a system that assumes that a dollar means the same thing to me that it does to Steve Jobs; it does not, and some adjustment is appropriate.

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

#315

Post by ikeboy »

john-radio wrote: post #314
ikeboy wrote: post #278

Earlier quoted context omitted.

Pigovian taxes are applied to mortal situations all the time. The most famous example is probably a carbon tax. >The point of the tax is not to "correct the undesirable outcome" but rather to avert it as much as possible using reasonable techniques. If you want to avert it as much as possible, set a million dollar fine for everyone. Why is that unreasonable in your view? If you don't think that would be a good idea,…

Well, I don't have a million dollars, so I wouldn't be able to pay that fine. It does not make sense to try to implement an unsupportable system. I did not say a good objective was to avert people from speeding "as much as possible" (or I would simply destroy all cars). I said "as much as possible using reasonable techniques. " I am not trying to revolutionize the field of public policy economics, here; I am just arg…

You're definitely arguing with various premises of public policy economics. Although you believe monetary fines are appropriate, you also claim to think we can't trade-off sacred values such as avoiding crime against mundane values like money.

The beauty of a Pigovian system is it doesn't require any assumptions as to how much money is worth to different people, or for that matter how much actions are worth. It just calculates the harm to society of the action and sets a fine accordingly. This is very much standard economics, see https://www.jstor.org/stable/725557 with 300 citations.

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

#316

Post by levythe »

AnthonyMouse wrote: post #242
ldoughty wrote: post #125

Earlier quoted context omitted.

Except corporations have already agreed to not seriously undercut each other... Geographic monopoly, understood collaborative price hikes... Forced plan changes post-capture that eliminate the most common plan and squeeze out an extra $5 per customer.... Simply having another player in the field is not competition, despite the federal government's claims.

That effectively requires a cartel with high barriers to entry, otherwise not doing that is an immediate competitive advantage to any new challengers. It's pretty hard to build your own last mile telecommunications network, how hard is it to build a ride sharing app?

How is building a ride sharing network not an area with high barriers to entry?

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

#317

Post by dwild »

manigandham wrote: post #265
nannal wrote: post #84

Earlier quoted context omitted.

Why? If I'm a poor speeding Fin, then a non-scaled speeding ticket could cost me a good number of days food. If I'm a rich speeding Fin then a non-scaled ticket is just the cost to travel quickly. When you're wealthy enough fines don't matter there's no point in the police enforcing them aside from as an additional income stream.

If this were the case, then rich people everywhere else would be speeding like crazy and just paying the small fines. That clearly is not the case, because fines are not the only thing rendered as a penalty. Driving privileges and criminal prosecution are quickly added on as behavior changes, even if it's small violations that add up. Everyone faces the same financial, driving access, and legal risk which equally dis…

> If this were the case, then rich people everywhere else would be speeding like crazy and just paying the small fines.

It's an issue, they call this affluenza.

> That clearly is not the case, because fines are not the only thing rendered as a penalty.

Sure but then if your deterrent are the others penalty, why is there the first penalty in the first place?

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

#318

Post by Hercuros »

ikeboy wrote: post #177
john-radio wrote: post #163

Earlier quoted context omitted.

> Therefore, if the rate is higher for some people, it's either insufficiently disincentivizing poorer people from speeding, or excessively disincentivizing richer people. I don't understand how you reached this conclusion. > Speeding has a constant negative effect on society. It doesn't vary based on how wealthy the speeder is. The point of a speeding ticket isn't to make things right or to make amends for the bad e…

>I don't understand how you reached this conclusion. Set X= negative value to society of an action we want to discourage, and Y= probability of getting caught. If a fine is set at X/Y, then the expected cost of doing this action is X (fine times probability), and so it will be done if the value of doing it is above X and won't be done if the value is below X, which is efficient. Any value other than X/Y is inefficien…

It's unnecessary to set a fine so high that the person doing it would "pay back" the harm to society on average if they did it. You merely have to set a fine so high that it deters people from doing it.

Let's say speeding causes a harm of 500 dollars, and there's a 10% chance of getting caught. Then you would put the fine at 5000 dollars. However, it might be the case that a 500 dollar fine (with an expected payment of 50 dollars) is already enough to stop everyone from doing it, since nobody likes speeding so much that they would pay 50 dollars for it on average. In that case, setting a 5000 dollar fine would just be overkill, and it could hardly be called efficient.

Moreover, your answer assumes that utility can always be measured solely in terms of money. If we measure the utility of society in terms of the number of people speeding (lower is better), then no amount of money can compensate for an increase in the number of people speeding. Then the answer would be to set the fine such that the number of people who choose to speed is the lowest, and does not involve the "expected harm" to society at all.

Even if you do assume that there is a conversion factor between "number of speeders" and "money", then it might still be sufficient to set the fine at a much lower number than you would get using your formula. You cannot just take into account the utility of the society, you also have to take into account the preferences of individuals (which guide their actions).

This can also be used to justify individual fines: if a 100 dollar fine is enough to stop you from speeding, and a 200 dollar fine is necessary to stop someone else from doing it, then why should I set the fine for both at 200 dollars? How can this be called efficient? You could argue it's more fair, but that's more a question of what's moral and has little to do with simple calculations, which you seem to be advocating for.

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

#319

Post by ikeboy »

Hercuros wrote: post #318
ikeboy wrote: post #177

Earlier quoted context omitted.

>I don't understand how you reached this conclusion. Set X= negative value to society of an action we want to discourage, and Y= probability of getting caught. If a fine is set at X/Y, then the expected cost of doing this action is X (fine times probability), and so it will be done if the value of doing it is above X and won't be done if the value is below X, which is efficient. Any value other than X/Y is inefficien…

It's unnecessary to set a fine so high that the person doing it would "pay back" the harm to society on average if they did it. You merely have to set a fine so high that it deters people from doing it. Let's say speeding causes a harm of 500 dollars, and there's a 10% chance of getting caught. Then you would put the fine at 5000 dollars. However, it might be the case that a 500 dollar fine (with an expected payment…

Yes, if for whatever reason nobody values an activity over the fine my formula produces, then any amount in between will be equally efficient: in your example any fine above $500 is equally efficient. But note that nobody ever pays the fine! In the real world, someone ends up paying the fine, it is not the case that fines deter everyone. So your example isn't reality.

>Moreover, your answer assumes that utility can always be measured solely in terms of money. If we measure the utility of society in terms of the number of people speeding (lower is better), then no amount of money can compensate for an increase in the number of people speeding. Then the answer would be to set the fine such that the number of people who choose to speed is the lowest, and does not involve the "expected harm" to society at all.

Sure, if your goal is prevent speeding at any cost then you should set the fine to be infinite. Or rather, set it at max wealth (since above that can't be collected) and pour all your policing resources into detection. Obviously, this also doesn't reflect reality.

>This can also be used to justify individual fines: if a 100 dollar fine is enough to stop you from speeding, and a 200 dollar fine is necessary to stop someone else from doing it, then why should I set the fine for both at 200 dollars? How can this be called efficient?

Again, it depends on the goals. In my framework the goal is to prevent people from doing something that harms society if and only if the benefit they get from it is less than the societal harm. Setting the fine equal to the harm (modulo probability) does that. If you charge some people more than this number, then they'll be deterred away from the action even when it would be efficient to do it. Conversely if some people are charged less.

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

#320

Post by zonidjan »

AnthonyMouse wrote: post #267
eric-hu wrote: post #264

Earlier quoted context omitted.

A ride sharing app is a dual marketplace. If you're cutting the price for riders past a point, you're cutting the pay for drivers.

That's assuming the incumbents are giving the premium for those customers to the drivers. But even if they were, the drivers are in a competitive labor market. If you get the customers with lower prices then you can also get the drivers because they'd rather be working for your rate than not at all.

But you will never get customers without drivers and you will never get drivers without customers.

Plenty of Uber/Lyft competitors have tried and failed. Heck, a few different companies tried here in Austin once we grew a spine and banned Uber/Lyft, only to die as soon as they came back to town.

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