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> drivers feel like their services are worth a lot, and passengers simply don't believe it That's an interesting issue. We see the same thing in real estate --
by rgbrgb 10y ago
> drivers feel like their services are worth a lot, and passengers simply don't believe it
That's an interesting issue. We see the same thing in real estate -- seller's think their homes are worth way more than anyone will pay for them. I think this is one of the reasons For Sale By Owner (skipping realtor fees) hasn't taken off yet in the US. The FSBO seller will price too high, the home will sit on market for a while and people will think there's something wrong with it so they'll stop considering it entirely. As an anecdote, someone approached us the other day wanting to sell their family home for ~$4M that would realistically fetch about half that based on recent comparable sales in the area. At our current scale we can talk him down from that ledge, but we'd really like that listing process to be self-service and online. Traditional agents will say you need a selling agent there to talk the seller down to a reasonable price but my gut says we could solve this with computers.
- aembleton 10y agoSounds like another industry ripe for disruption.
- rgbrgb 10y agoWorking on it :)
- ams6110 10y agoIt's simple market economics. Driving for Uber requires basically: 1) Owning a car 2) Having insurance and good driving/criminal history records. 3) Willingness to do the work. Even assuming Uber also has minimum age requirement, that's a very large supply of potential drivers, which is going to prevent wages from rising very high, unless there is artifical pressure such as regulation.
- honkhonkpants 10y agoBut the problem with Uber is not that sellers are listing too high, it's that Uber keeps jacking up the spread. This is not a true functioning marketplace because the buyers and sellers don't have good information. Only the market maker itself has all the information. Also it isn't really true that Uber lowers prices for riders when they lower prices for drivers. Uber practices active price discrimination to discover the highest price a rider will pay. If you get ten people together on the same street corner and everyone calls for an UberX, you'll get ten different prices.
- skybrian 10y agoSerious question: how do you know Uber's spread is increasing? I'm not even sure if it's positive or negative, given that they subsidize markets (running a loss) sometimes.
- honkhonkpants 10y agoAgain it's hard to tell because only Uber knows. Prices for UberX have gone up a lot in San Francisco. The minimum fare went from $5 to $6.55 in the space of only four months leading March 2016, and the service fee went from $1 to $1.55 in the same time. Meanwhile the drivers keep complaining their rates are going down, so I have to conclude that Uber's share increases.
- rajacombinator 10y agoAsk your drivers. I know if SF and Vegas they will all complain about how Uber increased their take. (Around the same time we saw a lot of articles about "unit economics" at startups.)
- harryh 10y ago> Uber practices active price discrimination to discover the highest price a rider will pay Wait really? Has this been written about? That would be very interesting!
- morgante 10y ago> If you get ten people together on the same street corner and everyone calls for an UberX, you'll get ten different prices. That would be a huge story and would be much more interesting than the typical Uber hit job. If it were true, I have to imagine that it would have been covered by a journalist intent on attacking Uber. Care to share some actual evidence?
- tux1968 10y agoWouldn't it be simple to claim that more demand (for any given corner or area) is immediately reflected in the price? That doesn't sound like a scandal; it's harder to arrange for 10 cars to arrive at a spot than 1.