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

#181

Post by leetcrew » Sat, Dec 14, 2019, 9:34 PM UTC

cortesoft wrote: post #133

umvi wrote: post #107

Earlier quoted context omitted.

Yes, that's fair. Please explain why you believe it is not fair. 1. I'm climbing a tree when I ought not to and fall and break my legs. I'm a poor construction worker which means I am now out of work. 2. I'm climbing a tree when I ought not to and fall and break my legs. I'm a wealthy programmer and just keep on going to work since my hands and brain still work fine. Fair? Or should the tree break my hands and give m…

You are missing the point. What we want is for no one to drive dangerously. To discourage this, we give tickets for speeding. For rich people, the fine doesn't mean anything to them because it is not enough money to matter, so they have no incentive to stop speeding. They keep speeding, putting everyone in danger. The point of a fine (at least for something like speeding) is to discourage the behavior. If you want th…

> a rich person speeding is just as dangerous to other drivers as a poor person speeding

this is probably not true. if you look at accident statistics, you'll notice that more expensive, newer cars tend to get into significantly fewer accidents per mile. rich people can afford more capable vehicles and they can afford to maintain them properly.

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

#182

Post by denimnerd42 » Sat, Dec 14, 2019, 9:34 PM UTC

Spooky23 wrote: post #173

WalterBright wrote: post #152

Earlier quoted context omitted.

> Companies already price by predicting what people are willing to pay So does anyone else who is doing work. For example, have a contractor come by your home to give an estimate on roof repair. It'll be highly dependent on him sizing up you and what you can apparently afford.

That’s where the invisible hand comes in and having functional markets matters. The difficulty in sustainably operating is also a demonstration of why heavily regulated taxis existed. When I had my roof replaced, estimates ranged from $12,000 to $75,000. We got 11 bids and paid $14k. That’s market forces at work, but also an example of a market without high capital costs.

those probably weren't all the same product though? like impact resistance shingles with an air gapped radiant barrier layed down with a ventilated roof line and all that fancy stuff is certainly going to cost more than generic shingles over tar paper.

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

#183

Post by daemonk » Sat, Dec 14, 2019, 9:35 PM UTC

does this work both ways? can we get cheaper prices if we are not willing to pay more and when it is not very busy.

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

#184

Post by [deleted] » Sat, Dec 14, 2019, 9:35 PM UTC

opportune wrote: post #80

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…

The worst part about price discrimination is that if there are a limited number of players in the market, it feels like, and maybe effectively is, price fixing. Now, it may not play out as direct collusion, but if only one company engages in it, they won’t be competitive for their wealthier customers, so it doesn’t make much sense. But if both participants in a duopoly do it, you have no options. It wouldn’t be possi…

[deleted]

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

#185

Post by 6gvONxR4sf7o » Sat, Dec 14, 2019, 9:36 PM UTC

tmerr wrote: post #69

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 wo…

If there were an ability to resell on a secondary market it'd probably level out like you say. If you sell me something at a super low price, I can turn around and resell it for a typical price, which would usually level this out (effectively being more players in the market). But with todays "everything is a service" market with 50 pages of terms and conditions, it doesn't work.

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

#186

Post by Johnie » Sat, Dec 14, 2019, 9:36 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…

What you're referring to is the three degrees of price discrimination.

https://www.investopedia.com/ask/answers/042415/what-are-dif...

First Degree: This type of pricing strategy takes place when businesses can accurately determine what each customer is willing to pay for a specific product or service and selling that good or service for that exact price. (ie car sales)

Second Degree: Companies price products or services differently based on the preferences of various groups of consumers. (ie Costco vs Whole Foods)

Third Degree: Companies price products and services differently based on the unique demographics of subsets of its consumer base, such as students, military personnel, or seniors. (ie flights)

The purpose here is for a company to identify the maximum consumer surplus it can acquire. As commented below, this surplus also changes based on supply/demand. Supply/demand change based on competitive products or substitute products.

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

#187

Post by [deleted] » Sat, Dec 14, 2019, 9:37 PM UTC

distances wrote: post #148

mertd wrote: post #135

Earlier quoted context omitted.

This is a great idea and also is nearly impossible to implement. There is no way to tell how wealthy someone is and even then how much of that wealth is liquid.

It's not based on wealth but rather income, and the state obviously has this data readily at hand due to taxation. I don't see any reason why that couldn't and shouldn't be adopted all over the world.

[deleted]

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

#188

Post by stereolambda » Sat, Dec 14, 2019, 9:38 PM UTC

wutbrodo wrote: post #149

stereolambda wrote: post #60

Earlier quoted context omitted.

You're presenting a future where there is (in the limit) no point in earning money. Lately there was a discussion about how in the future it makes no sense to buy insurance if someone is willing to sell it to you, you are always better off saving and you won't get insured if you actually need it[0]. I understand all these specific scenarios may be kinda-dismissed with some commonsensical argumentation, but has someon…

> there was a discussion about how in the future it makes no sense to buy insurance if someone is willing to sell it to you, you are always better off saving and you won't get insured if you actually need it[0]. This is a misunderstanding of how insurance works. It makes sense to self-insured in expected $ value, but not necessarily in expected utility. There's nonzero value to lowering volatility[1], and the insuran…

Yeah, I wanted to give an example and disclaim redoing that specific discussion if possible. But just to provide a different view, what you're saying is fine theoretically, but in practice often people see the insurance situation as "some bad costly thing X can happen to me, I want to pay reasonable money to not have to eat the whole cost if it happens". Now if insurance companies had some super-accurate data and models on you (a futuristic perspective here), they could just infer if X will happen to you and take some free money if it won't and refuse insurance/make you pay everything plus premium otherwise. One similar case nowadays is health and old age pension, though these tend to be very regulated or state-run (i.e., tax funded). The point is that the scope of things where this applies can become very wide in the future.

Someone in the linked comment tree said "dispersion of the cost in wider population" is "not insurance, but a social solidarity scheme" and you may agree. But it's possible that we are currently running some "social solidarity schemes" only because of the imperfect information.

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

#189

Post by mamon » Sat, Dec 14, 2019, 9:40 PM UTC

umvi wrote: post #138

Baltasaur wrote: post #115

Earlier quoted context omitted.

This is such a colossally bad take. Tickets have the distinct purpose of disincentivizing dangerous driving. They don't do that if it's a flat fare and the person breaking the speed limit is sufficiently wealthy. Thus, if you want speeding tickets to affect everyone equally, you make them proportional.

The fee is only one aspect of the ticket. The other aspect is demerits on your license which go toward revoking it. Dangerous driving is discouraged by the threat of getting your license revoked, not by getting a fine. Speeding tickets do affect everyone equally, by applying the same number of demerits toward revocation of the license. Hence why rich people don't drive like maniacs even though they can "afford" to fr…

>> Dangerous driving is discouraged by the threat of getting your license revoked, not by getting a fine.

If so, then why not use that exclusively and get rid of speeding tickets?

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

#190

Post by cortesoft » Sat, Dec 14, 2019, 9:41 PM UTC

brightball wrote: post #178

cortesoft wrote: post #150

Earlier quoted context omitted.

This doesn't make any sense... what these algorithms are doing is trying to determine how price insensitive the person is... they are trying to find a price point where, for this individual, they aren't going to make the effort to find an alternative because it is not worth the extra savings. If this leads people to work harder to find a better price, their software isn't working right... it should be charging that p…

The effect that I’m assuming is that this will work until people realize it’s happening. At that point, the price sensitivity will increase as a matter of opposition to price gouging.

Price discrimination happens all the time currently, already, and has forever. Whether you know it is happening or not, everyone is still going to have a different price they are willing to pay; sure, maybe people will, as a whole, care more about not paying more in the future, but how much they care will still vary between people, and that will be priced in.