Uber's "Route-Based Pricing" Predicts How Much You're Willing to Pay
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Re: Uber's "Route-Based Pricing" Predicts How Much You're Willing to Pay
#2"Uber is a company filled with over-optimizers, who will continue to futz with prices and hope to find equilibrium."
Ha ha! Yeah. Drivers tell me they have little consistency in their take; there was even a short time period where Uber stopped paying bonuses. (that didn't last long)
Re: Uber's "Route-Based Pricing" Predicts How Much You're Willing to Pay
#3We are building smarter and smarter machines that nickel and dime from us at scale. How does this end?
Re: Uber's "Route-Based Pricing" Predicts How Much You're Willing to Pay
#4We are building smarter and smarter machines that nickel and dime from us at scale. How does this end?
It leads to consumer surplus being further and further converted into supplier surplus. Ultimately, this trend will approach 100% conversion so that there is no more consumer surplus and all surplus is realized by producers.
It is an interesting sort of economic reality to speculate about...but I don't really have enough background to even credibly start.
Re: Uber's "Route-Based Pricing" Predicts How Much You're Willing to Pay
#5So they looked at the value of my house before quoting me? Maybe that is why I was surprised to see them want $50 more than normal a few weeks ago to get me home.
Re: Uber's "Route-Based Pricing" Predicts How Much You're Willing to Pay
#6We are building smarter and smarter machines that nickel and dime from us at scale. How does this end?
It leads to consumer surplus being further and further converted into supplier surplus. Ultimately, this trend will approach 100% conversion so that there is no more consumer surplus and all surplus is realized by producers. It is an interesting sort of economic reality to speculate about...but I don't really have enough background to even credibly start.
You're ignoring the existence of competition...
Re: Uber's "Route-Based Pricing" Predicts How Much You're Willing to Pay
#7Its funny. When I first started using Uber, every time I took a ride and paid the fair its was almost a joyous experience to pay what seemed like so little. It made me want to use Uber for all sorts of trips and tell everyone else to do the same.
Now every time I open it, it feels like just a liiittle too much to use for anything but a very occasional trip.
They get more from me for each trip I now almost never take. Win the battle, lose the war.
There should be a name for this kind of algorithm. How bout "Pyrrhic Optimizers"?
Re: Uber's "Route-Based Pricing" Predicts How Much You're Willing to Pay
#8Earlier quoted context omitted.
It leads to consumer surplus being further and further converted into supplier surplus. Ultimately, this trend will approach 100% conversion so that there is no more consumer surplus and all surplus is realized by producers. It is an interesting sort of economic reality to speculate about...but I don't really have enough background to even credibly start.
You're ignoring the existence of competition...
You're ignoring duopolies.
Re: Uber's "Route-Based Pricing" Predicts How Much You're Willing to Pay
#9Earlier quoted context omitted.
It leads to consumer surplus being further and further converted into supplier surplus. Ultimately, this trend will approach 100% conversion so that there is no more consumer surplus and all surplus is realized by producers. It is an interesting sort of economic reality to speculate about...but I don't really have enough background to even credibly start.
You're ignoring the existence of competition...
Not really, competition only checks this effect if the price-discrimination advantage isn't so compelling such that:
1) All firms start doing it...because what Producer wants to leave money on the table?
2) The firm that does it best gains a significant advantage over competitors thus leading towards non-competitive market conditions.
And, from a purely speculative perspective, if the price discrimination advantage wasn't strong enough to result in one of the two above situations, then why would a firm invest in this sort of tech anyway?
But, like I said, I am no where near educated enough in the subject matter to really credibly start speculating too far. And it is certainly conceivable that competition could check this trend...but I don't believe it is a sure thing.
Re: Uber's "Route-Based Pricing" Predicts How Much You're Willing to Pay
#10Its funny. When I first started using Uber, every time I took a ride and paid the fair its was almost a joyous experience to pay what seemed like so little. It made me want to use Uber for all sorts of trips and tell everyone else to do the same. Now every time I open it, it feels like just a liiittle too much to use for anything but a very occasional trip. They get more from me for each trip I now almost never take.…
They were losing money on you before by subsidizing your ride. Now their price better reflect the actual economic costs, and it's not surprising that this means you don't take a taxi as often.