It’s not gouging, anymore than selling your home for $200K when five years ago it was $50K is gouging.
“Gouging” is just a whiny term for “pricing.” People get unreasonably annoyed whenever a price is revealed to be based on nothing more than what people are willing to pay, regardless of the product. Go into any discussion on ticket scalping and see how many people seem to genuinely believe that it’s deeply immoral for pure luxuries like sport/concert tickets to be priced based on demand.
This:
…is what lots of people actually believe.
It’s gouging when something is basically auctioned off to the highest bidder. At a certain point it becomes unreachable by the average person.
If you’re middle class or up Uber’s surge pricing is of no concern. If you’re lower down on the ladder it’s a big “screw you”. Someone recently asked about classism on the Dope. This would be a classic example.
Of course, there is plenty of room for debate about at what point pricing for demand becomes gouging. I’ll also say that there is a vast difference between transportation, which is pretty close to a true necessity in this world, and concert tickets. Making transportation accessible to all is pretty important in today’s world. No one is going to lose their job because they couldn’t get tickets to see Kid Rock (or whoever is big these days), but they might lose their job if they can’t get to work, or they might be stranded somewhere or unable to deal with a family emergency if they can’t get transportation.
My local social services agency offered discounted options for taxi and other transport service so my disabled spouse could get to his chemotherapy treatments - as it happened, we didn’t require them so we did not take them. But more than one other person at that doctor’s office DID require help getting to and from treatment needed for a horrific illness, and that included days and times that might come under surge pricing - gee it would suck to be poor and miss your medical treatment because profit goes above all. Uber doesn’t give price breaks to people like that, though, because Uber doesn’t care. The fact that a disastrous illness like cancer can take you from the middle class to bankruptcy and poverty pretty damn quick is just salt in the wound. That’s just one example. I have coworkers who are on food stamps and TANF who need something like Uber as a back-up if their beater cars break down before work - having the cost of ride double or triple can impose real hardship on them, and surge pricing can run even higher than that. That’s another example.
Basically, some of you are fortunate enough that it doesn’t matter if the cost of an Uber ride increases by an order of magnitude. The sad thing is your “fuck you” attitude towards your neighbors who are not so fortunate, some of whom are traveling for reasons far more than a concert or a vacation trip.
It’s gouging if there’s no meaningful competition, whether by monopoly, collusion, or something of that nature. There are meaningful options here. You can take a cab. Sure, you might have to wait, but if there were no Ubers or Lyfts, you’d be waiting even longer, with fewer transportation options on the road.
And it also imposes real hardship on people in that situation when there’s a wait of several hours because of price controls.
You know what? I’ve been taking taxis for one or another for decades now. I have NEVER waited “hours and hours” for a cab anywhere*. Now, there may well be locations where this is true and if so that is a problem that needs to be addressed. However, in my particular area it’s not an issue.
So… if I needed a cab in my area to get to work because something or other happened I’d might be late to work… but I’d still be able to get to work. The longest - longest- I’ve waited for a cab in my current location is 20 minutes. Typically, it’s MUCH shorter.
Likewise, I’ve heard some horror stories about Uber, but I don’t assume ALL Uber drivers are rapist/murderers because a few are, and likewise I don’t assume all taxi drivers are perpetually tardy. Methinks there’s a bit of double-standard going on here.
Uber’s practices, to my mind, seem designed to drive the competition - i.e. official taxi services - out of business so then can then enjoy a monopoly. At which point they can raise prices all they want, or just not serve certain segments of the community, or whatever the hell they want to do. I don’t see that being good in the long run for consumers or society regardless of the short term benefits.
- Locations I have taken a taxi include Detroit, Baltimore, Chicago, and Phoenix
So then take a taxi. Nobody is forcing anyone to take an Uber or Lyft. If I want to spend more on what I perceive to be a better and faster mode of transportation, what’s wrong with that? It’s not affecting your ability to take a taxi (and actually takes pressure off the taxi system, making the wait even less for you). If there were no other choice, yes, I agree with “gouging” as a fair description of the practice. But it’s not gouging anymore than me buying a $10 hamburger at Red Robin is “gouging” when I could just go down the street to McDonald’s and get a burger off the dollar menu. I choose Lyft (or Uber) because they actually show up and pick me up, unlike my experiences with calling taxis to the airport. Taxis in Chicago have been undependable for me, and I’m willing to pay more for a car that actually shows up on time (usually within 5 minutes in my neighborhood, where taxis, when they did show up, would take 30-45 minutes., often requiring a call of “where the fuck is my taxi?” to the dispatch.)
The issues here are not having the choice between “standard” and “premium” - the problems are
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Uber portraying it as something it’s not, or conversely, denying that it is what it is
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Skirting regulations that were put into place for a reason for people delivering a service - like driver requirements, insurance, and so forth. Sure, Uber has caved on quite a few of things because it was forced to do so, all the while whining and crying about how abused they are when all that’s being asked is that they follow the same rules as everyone else in their industry
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A business plan that has the effect of undercutting the competition and putting them out of business - after which, no, you would NOT have the option to call a cab because they wouldn’t exist anymore.
If Uber would admit that they’re a taxi/livery service, follow the rules without acting all butt-hurt, and stop undercutting in hopes of driving out competition I’d feel a bit more warm and fuzzy about them.
Oh, and if they’d have a complaint number I could call so their drivers would stop parking in my driveway when picking up people from other properties on my block that would be nice, too - but there’s no way to register a complaint about a driver unless you’re the rider. With a taxi company I can call up and say “hey, your driver is being a dick” but with Uber - oh, no no no - the driver isn’t our employee, he’s an independent contractor, you’ll have to take it up with them individually. Which is yet another way they refuse to play fair. The refuse to take responsibility for their employees.
That isn’t gouging. Rising prices is a perfectly fine way to deal with scarce resources: it helps to manage demand in a way that could be more equitable than rationing. It isn’t perfect of course, but neither is scarcity.
Gouging is generally not defined as “this thing is unaffordable (whatever the vague term “unaffordable” may be). It’s usually used in the context of a coercive practice to raise prices when customers have little to no choice to engage in the transaction.
So, if traffic is bad some day because a lot of people are on the road and there’s been an accident or two, raising the price of a ride from $10 to $25 isn’t gouging. People can choose the wait out rush hour, take public transportation, or whatever.
If there’s a hurricane bearing down on your home and people are fleeing, raising prices by multiple times the going rate could well be gouging. People generally wouldn’t have the choice to delay their trip without risking life and limb.
So to say it succinctly: gouging is preying in consumers with no other realistic choice. Gouging is not “it costs too much for what I’m willing to pay.”
That’s certainly true in NYC. Because Uber is basically another livery service. All Uber drivers are licensed by the Taxi and Limousine Commision and ever Uber vehicle I’ve ever used had a TLC license plate. Some of the drivers work for other services at the same time. Some of the other larger car services have competed by using their own app. And while I’m not sure if the traditional car services used “surge pricing”, the pricing for the same ride was often different depending on the time of day. For me, surge pricing is a lot less stressful than sitting in a yellow cab that’s stuck in a traffic jam, watching the fare steadily click up. One of the things I dislike about yellow cabs is you don’t know how much the ride is going to cost when you start,
And while they’ve added a lot of supply to the traditional car service industry, they’ve also added demand. There a whole generation of young people that seldom used yellow cabs or black car services that are now “Ubering” everywhere.
And the demand pricing isn’t new, hotels and motels have done it for years. if you want to rent a room overlooking Times Square for New Years Eve, I bet that room will cost 5x to 10x of what it would cost during the second week in January. And I can get a beachfront hotel room on the East End of Long Island in the winter for under $100 per night but that same room would run over $500 a night in July.
I like the way you put that - mind if I use it?
Be my guest.
You know, this is still the SDMB and we are, in fact, supposed to argue from the evidence. And Broomstick, Little Nemo, and SnowboarderBo… fine posters as they otherwise are… are completely talking out of their asses and pulling up arguments so they can enjoy their anger.
So here are some facts with some evidence to support them:
- ALL SURGE PRICING BONUSES GO TO THE DRIVER. When you remove surge pricing, you’re not taking money from Uber, you’re taking it from the drivers. Period.
Here’s my proof. This is a surge fare which took place during the NCAA Final Fours. Let’s go into this in detail:
The rider paid Uber $21.39 to be driven 11 miles, a drive which took 17:41. I also received a $7 tip because I’m awesome. His surge pricing for this was $10.04, meaning he would have paid $11.35 for a non-surged price.
As a driver, I receive .72/mile and .045/minute base - with no boost, I would have earned $10.62 pre-tip ($37/hour equivalent). (The smallest earnings you can make as a driver is $2.62 - usually “I’m too drunk to walk to my hotel 2 blocks away” type trips.) As a general rule, with no surge an Uber Driver, pre-tip, earns 70.295% of what you pay Uber. Lyft drivers earn 75.289% on average. Yes, I keep a spreadsheet on this stuff.
However, look at this ticket. Because of the boost, while the driver paid out $28.39 (including tip) for the ride, I earned $27.08 of that, or 95% of the fare. Not 70%:
… The driver gets all the surge pricing.
… Uber lowered its margins to offer the rider a better value (seriously, check it out compared to a Non-Surge Ticket.
… Instead of sitting at home watching the games, I was incentivized to work that evening, foregoing entertainment for earnings.
So, cutting out surge pricing didn’t affect Uber at all - it likely saves the company marginal dollars. What Hawai’i did was cut driver earnings. Period. Full stop.
Hawai’i’s ignorance of how this fully works just cut significant dollars from the worker while making Uber financially stronger. Congratulations! Sound argument! Great research!
- UBER DOESN’T HIDE PAYMENT DETAILS FROM ANYONE. All this is available to the drivers and passengers. The idea that we are being taken advantage of… “lied to”… is only supportable by those who neither drive nor ride nor look at their bill details. Or click on my above links.
Now one thing Uber/Lyft does hide is the destination - we do not know where the fare is going until after we pick them up and are in the car. This prevents us from picking and choosing our fares - “we’re going to the eastside? NUH-UH! CANCEL!” Naw, you don’t get that discriminatory shit with Lyft/Uber - just with taxis.
3. People in this thread have already been proven spectacularly wrong on the Insurance issue, so I don’t have to go into how Uber/Lyft provides us with insurance, our insurance premiums are automatically paid out of each ticket, and there it is. Y’all are wrong.
Again.
- Removing surge pricing increases drunk drivers, drunk driving accidents, and drunk driving deaths.
2am surge pricing is common and keeps many drivers on the road when the bars close. Picking up drunk people can be painful - vomiting, aggressiveness, general loudness, etc. But it pays… or it did… because of surge pricing, when all the drinkers would light up their Uber requests at 2:01am.
What, you think I want to be up driving at 2:30am on a Saturday picking up vomitous kids for a whopping 1 dollar extra? LOL.
No, tonight I am going to be turning off “people” and turning on McDonald deliveries, because Uber still pays surge pricing on food and, in my neighborhood, are guaranteeing 300% food delivery pricing from midnight - 6am tonight. And if you don’t think people will pay $18 to have $7 of food delivered to them, you don’t know San Antonio. 
So the drunks will not have my services, because Uber has now priced them out of my desire - again, why pick up some vomiting 22 year-old for $7 when I can earn $17/trip delivering McD’s? Previously, I would’ve picked up the drunk kid - deliveries can be a pain in the ass, drunks tip better than deliveries, the surge pricing would’ve likely paid better than McDonald’s deliveries, and it’s a community service.
But now? No. There is no longer any incentive to put your drunk ass in my car. I will make $60/hour delivering food. Delivering drunks safely? It now pays about $25/hour and I’m now out of that market.
Winning!
- Removing surge pricing kills Uber/Lyft for events.
Here’s what happens on the drivers side when the passenger is being “gouged” for having surge pricing to, say, leave the Spurs game:
Taxis/Rideshares have to follow the same path to the one parking lot where we can pick up people. At the end of a highly attended game, it can take up to 30 minutes from getting the request to picking up the passenger. Then, given we don’t know where we are going until we pick them up, we may find we just spent 30 minutes driving someone 1.2 miles - a $2.75 earnings no surge, about $10 with surge.
Why do I want to take the chance that I’m spending 30+ minutes to earn $2.62 (Oooh! Sorry - $3.62 with the new revised “surge” pricing.) when I can stay on the NW side of San Antonio and earn $25-60/hour? Y’all take your own damn cars to the Spurs game and pay $30 for event parking, I’m not picking you up! It’s no longer worth it.
All Hawai’i did was fuck the people driving for Uber/Lyft, and by extension, they fucked the people who use the services for the most extreme times:
… when they are drinking
… when they go to events, or, especially, leave them
So, in the future, let’s not make factually incorrect assertions as have been repeated as fact in this thread, including the following:
- Uber gets a lot of money when they charge surges. No, they do not. The surge pricing goes directly to the driver, and Uber slashes its margins.
- Uber/Lyft drivers are driving without insurance.
- Removing surge charges protects consumers. No, it does not. it merely decreases the availability of the service for those who need it most at the times they need it most.
- Removing surge pricing does not hurt Uber. It hurts the driver. And the customer.
And Broomstick, a “business plan which undercuts the competition” is known as… a business plan.
And I gotta tell you, as a person whose family had a $30 million/year business delivering telephone directories a decade ago, listening to taxi drivers whine about technological change and industry disruption is kind of funny to me - “Yup! Life sucks! You work hard then somebody changes the rules and your $30 million/year business is dead in 3 years! Shit does happen, does it not?”
That’s quite interesting, I didn’t know that Uber doesn’t show the destination until you’ve picked up the passenger. I can see how that can help prevent discrimination, but I’d also be fine if a driver really didn’t want to go to the airport, for example.
That might have been true years ago, but virtually no US municipality where TNCs operate now hasn’t altered regulations to cover them. Meanwhile, the TNC business model has stayed the same. Disregarding regulations was an operational choice, not a business model.
Are there any exceptions to this? Because, just yesterday my car wouldn’t start. And I had a meeting in another state, about an hour away.
So I checked Uber and decided that $150 or so ( round trip, double the quote ) was worth it. Because I stood to make a couple of grand if the meeting was successful ( it was ).
But now I’m a little disturbed to find that the driver didn’t know he had to drive me to freaking Connecticut at the time he picked me up. What if he had time limitations? Do they show the driver the estimated trip length when they accept a fare? And let them know if they are going somewhere where they can’t legally grab a return fare? ( I’m assuming that since they are licensed NY car services that they can’t make a pickup in Connecticut).
According to yellow cab rules, a trip like the one I made ( the portion outside NYC, that is) is totally negotiable between the driver and passenger and the driver can charge whatever he wants or outright refuse.
Drivers are now notified they are going on a long trip, although declining still affects their internal reliability statistics. This is a fairly recent change, though. Uber made a lot of procedural adjustments after Travis Kalanick was ousted as CEO.
I’m repeating myself a little bit, but in New York City they follow the same rules and regulations as any other livery service. The drivers and cars are licensed and registered by the city and insured like any other “black car” car service.
https://www.uber.com/drive/new-york/
Yellow cabs have always been granted a monopoly on “street hails”, meaning a car service car wasn’t legally allowed to stop for a customer flagging them down on the street ( at least in Manhattan, not sure about other boroughs). You could always use a car service but you had to call them to arrange for pick-up.
What Uber did was make the “calling to arrange for pick-up” part of the equation fast and easy, thus putting a huge dent in the yellow cab business model. Yellow cabs and other car services are now trying app- based hailing, but it’s my understanding that they just aren’t as efficient and can’t always locate a driver.
I see that they’re a huge problem for yellow cabs and traditional car services. But yellow cabs and car services had years to come up with innovations to make transportation easier for the customer and they never even tried. Yellow cabs, in particular, had a business model based on artificial scarcity - which was why a medallion used to cost over a million bucks. So they got outplayed.
And a a consumer who spent years stressing over “should I cross my fingers that I can find a cab to hail or call a car service 30 minutes in advance”, this innovation is welcome.
Apparently, you are clueless that most of what you point out I never talked about, but whatever, right? Whoever doesn’t worship Uber is the bad guy, amirite?
And… why should I care? It’s the same price to me regardless of whether it goes to the driver or to the company Uber or however they split it. If Uber prices me out of the market it doesn’t make any difference to me.
Or maybe, given my circumstances I’d rather wait longer and pay less than have a driver show up sooner and pay more. Sort of like when I order stuff on line I prefer to have it delivered in 3-5 days rather than pay a premium for overnight delivery. If I’m short on funds a particular week but not on time it would be nice to have that option, don’t you think? Unless you’re higher up the economic ladder where it just doesn’t matter.
Good for him (or her)
I actually find that rather sad. When do you rest and relax? Go-go-go all the time isn’t healthy either physically or mentally. What are you earning money for? There’s more to life than work.
I don’t think I was the one who claimed Uber was lying to their drivers.
Well, that must totally suck if you are going to a genuinely dangerous part of town. Also, I was not aware that taxis could legally discriminate in that manner. I have no doubt it happens. I’m also pretty sure it happens with Uber even if it shouldn’t because people are dicks.
It wasn’t that way originally and, as I said, if they fixed that it’s great. Wonderful. Bravo.
Cite.
I don’t think you could get me to pick up “vomitous kids” for any price, frankly. If you don’t want to do it why are you out there?
Um… no, I am completely unfamiliar with San Antonio but if the streets are full of “vomitous drunks” that may not be a loss…
If you’re an Uber driver you’re an independent contractor which means being in business for yourself. As you note, when things go well there’s a nice payoff. When they go crappy you lose. That’s the downside of being your own boss. You get more rewards along with more risk. If you don’t like it become someone else’s employee where having a regular wage evens out the ups and downs.
The issue is that they may have inadequate insurance - [url=https://www.policygenius.com/blog/insurance-secret-uber-doesnt-want-know/]this article covers some of the pertinent issues.
Undercutting the competition to drive that competition out of business so you can then turn around and then gouging, i.e. preying on consumers who at that point have no other realistic choice is a something done in the late 19th/early 20th Century robber barons, which lead to all sorts of regulation and laws when the average consumer got fed up with the bullshit.
Yeah, it does - I’ve had two careers end due to advancing technology so I get it, but that doesn’t mean every new thing that comes along is wonderful or desirable.
…a business plan that undercuts the competition by charging significantly less than cost is a stupid business model.
A business plan that charges significantly less than cost and only is kept afloat because investors keep pumping in 2 billion a year is a failing business model.
A business plan where the only path to profitability is down the road of a technology that is probably decades away from maturity and would literally put you out of work if implemented is a doomed business model.
Do you see any taxi drivers in this thread?
Uber is not going to put taxi’s out of business. Because taxi’s don’t run at a loss. And eventually Uber are going to have to either raise their prices, significantly change their business model, or they are going to go out of business. Uber aren’t “changing the rules.” They have consistently broken the rules.
I would think most of us work in industries where technological change is causing industry disruption. I certainly do. So to bring that up here is really missing the point. I don’t find Uber to be a problematic business simply because its competing with taxi drivers. I find it to be problematic because their entire business model relies on cutting corners, on breaking rules, on ignoring regulations. I find it to be problematic because their business model relies on taking advantage of people who have to rely on the “gig economy” to barely pay the rent. I find it problematic because from the start Uber has been an exemplar of “bro-culture” in tech, one that treats women and people of colour like garbage.
I’m happy that you are able to ignore all of this. I, and many others, can not. Would it be cheaper for me to catch an Uber? Sure. Are there more important things than saving a few bucks? Yep.