Uber, Lyft drivers manipulate fares at DCA causing artificial price surges • Hacker News Board

Re: Uber, Lyft drivers manipulate fares at DCA causing artificial price surges

#41

Post by wlesieutre » Mon, May 20, 2019, 1:34 PM UTC

lexs wrote: post #18

wlesieutre wrote: post #12

News flash: if you go out of your way to classify your entire workforce as contractors, you don't get to decide when they work or not. It turns out this has consequences on both sides. If Lyft wants to decide when their drivers are working, there's a process for this: 1) Hire employees 2) Give them a schedule 3) Pay them hourly plus mileage

And suddenly Uber/Lyft are like any other Taxi company just with a massive valuation.

There's probably a balance to be struck, because part of the ridesharing design's efficiency is that if demand drops they can drop their rates paid to drivers, and the drivers who don't want to drive at those prices will stop.

So if Lyft starts to say "we always want X drivers available as a base load, and we'll open up to contractors to fill in the demand spikes" it might make the contractor role too unreliable for anyone to bother doing it. At the very least, their costs would go up for both the employed drivers and the extra contractor drivers. Since their valuations comes mainly from a cheap labor pool, that presumably kills it.

But in the current situation, if all their drivers at the airport sign off and say "I'm not driving at these prices," you get surge pricing to make it worth driving, that increases costs too. That's what happens when you're buying labor from independent contractors - if they don't want to sell it to you at a particular time for any reason, they don't have to.

The real question here is "If Lyft recognizes when these organized sign-offs are happening, calls their bluff, and refuses to activate surge pricing, what happens?"

Do the drivers really refuse to drive at the regular pricing and go home? Or do they all give in to a more tamper-resistant algorithm and keep driving at regular rates?

Re: Uber, Lyft drivers manipulate fares at DCA causing artificial price surges

#42

Post by metalliqaz » Mon, May 20, 2019, 1:34 PM UTC

Waterluvian wrote: post #14

I can think of a ton of technical ways Uber and Lyft can combat this. And they probably will. And they'll be short term happy and long term foolish. Because they're treating the symptoms, not the cause.

Their hands may be a bit tied on addressing this issue, because if they start rejecting drivers based on when they choose to work, it's hard to call them contractors.

Re: Uber, Lyft drivers manipulate fares at DCA causing artificial price surges

#43

Post by metalliqaz » Mon, May 20, 2019, 1:35 PM UTC

blakesterz wrote: post #19

I don't quite understand this: "The lot fills with 120 to 150 drivers sometimes for hours, waiting for the busy evening rush. " Are they saying drivers site and wait for hours to do this?

That's what happens at airports. The drivers are there anyway. While they wait, they coordinate to increase pricing just before an airplane drops off a bunch of passengers.

Re: Uber, Lyft drivers manipulate fares at DCA causing artificial price surges

#44

Post by neaanopri » Mon, May 20, 2019, 1:36 PM UTC

lexs wrote: post #18

wlesieutre wrote: post #12

News flash: if you go out of your way to classify your entire workforce as contractors, you don't get to decide when they work or not. It turns out this has consequences on both sides. If Lyft wants to decide when their drivers are working, there's a process for this: 1) Hire employees 2) Give them a schedule 3) Pay them hourly plus mileage

And suddenly Uber/Lyft are like any other Taxi company just with a massive valuation.

Well, not for long...

Re: Uber, Lyft drivers manipulate fares at DCA causing artificial price surges

#45

Post by joering2 » Mon, May 20, 2019, 1:36 PM UTC

lexs wrote: post #18

wlesieutre wrote: post #12

News flash: if you go out of your way to classify your entire workforce as contractors, you don't get to decide when they work or not. It turns out this has consequences on both sides. If Lyft wants to decide when their drivers are working, there's a process for this: 1) Hire employees 2) Give them a schedule 3) Pay them hourly plus mileage

And suddenly Uber/Lyft are like any other Taxi company just with a massive valuation.

Not quite. Real taxi corporations have approval of city/state assembly to do business so that they control the amount of taxi cars being part of daily street flow. (Im ignoring the fact that this system is broken and corrupted)

Re: Uber, Lyft drivers manipulate fares at DCA causing artificial price surges

#46

Post by metalliqaz » Mon, May 20, 2019, 1:36 PM UTC

mikeash wrote: post #39

metalliqaz wrote: post #33

Earlier quoted context omitted.

Not all. The large majority, but not all. There are very likely one or two drivers in the area that don't participate, simply because they aren't in the parking lot at the moment they orchestrate the mass logout. Surge pricing is about supply and demand, so if expected demand is high (like at an airport) they need a lot more than one or two drivers.

I don’t think it even necessarily needs to be a large majority. It just needs to be enough such that the remaining drivers aren’t sufficient to meet demand. Depending on circumstances, that could require anywhere from one driver to all of them. It’s a great illustration of how supply and demand work to determine prices.

Yeah, agreed, but these guys are going for maximum rate, so they have to get as many as possible.

Re: Uber, Lyft drivers manipulate fares at DCA causing artificial price surges

#47

Post by cypherpunks01 » Mon, May 20, 2019, 1:37 PM UTC

This is really curious, in that it appears to be a normal strike for higher wages, except it's being coordinated on an hourly basis for just a few minutes until the company agrees to pay more!

Contractors can decide when and how they want to work, and therefore determine the price at which to sell their labor at, so to me it seems they are simply exercising their rights here. Like others have mentioned, if most drivers don't choose to participate, then this "scheme" wouldn't function.

Re: Uber, Lyft drivers manipulate fares at DCA causing artificial price surges

#48

Post by mruts » Mon, May 20, 2019, 1:37 PM UTC

Waterluvian wrote: post #31

deweller wrote: post #9

> They can’t afford to pickup people at Reagan for $4 in rush hour traffic. Are they really getting paid $4 to give someone a ride? That seems so low that drivers would be incentivized to find another job.

I'm not sure if the number is accurate but I do know how amazingly stubborn humans can be in finding a new job. I've had people refuse to quit a job that they groan about every day when I've offered them almost double the salary to work elsewhere with far better terms. Humans are risk averse and those who live paycheck to paycheck are especially so. It defies logic until you consider that their fear of the unknown +…

Maybe that’s all true, but it doesn’t really make sense for Uber/Lyft. They could go back to their job driving whenever they wanted.

Re: Uber, Lyft drivers manipulate fares at DCA causing artificial price surges

#49

Post by peterwwillis » Mon, May 20, 2019, 1:37 PM UTC

The only economic model that make Uber and Lyft make sense is if drivers are willing to take low pay (considering all their other costs). If they make more money than cab drivers, the whole model falls apart, because then cabs will be cheaper and the service won't be competitive. (Granted, the lack of having to pay for medallions saves them a bunch of money)

I think the only long-term business plan that makes sense for them is black cars, or people who don't want the hassle of Taxis.

Re: Uber, Lyft drivers manipulate fares at DCA causing artificial price surges

#50

Post by mikeash » Mon, May 20, 2019, 1:39 PM UTC

metalliqaz wrote: post #46

mikeash wrote: post #39

Earlier quoted context omitted.

I don’t think it even necessarily needs to be a large majority. It just needs to be enough such that the remaining drivers aren’t sufficient to meet demand. Depending on circumstances, that could require anywhere from one driver to all of them. It’s a great illustration of how supply and demand work to determine prices.

Yeah, agreed, but these guys are going for maximum rate, so they have to get as many as possible.

Indeed. And as the rate grows higher, there’s ever more incentive to defect from the scheme. This should be a case study taught in Economics 101, it’s so pure and clear!