8 ms·

That's a huge "bug" not to notice for presumably a long time. I recently had a Lyft driver in NYC talk to me about how he quit uber after doing the math on what

That's a huge "bug" not to notice for presumably a long time. I recently had a Lyft driver in NYC talk to me about how he quit uber after doing the math on what his fare should have been when a passenger told him how much they were being charged. He brought it up to uber and then quit when they didn't fix it. Anecdotal story but seems extremely relevant now

rhcom2 9y ago
Hopefully he'll see some restitution too and it won't be only current drivers.
potatolicious 9y ago
What your driver was talking about may not be a bug/math error like stated here. After rolling out guaranteed whole-ride pricing (as opposed to metering) Uber is allegedly testing algorithms to bid different prices for rides to both driver and passenger. i.e., passenger sees a fare of $X, while driver sees a fare of $Y, where presumably $Y < $X. Passengers' fares can be "optimized" by estimating a specific passenger-trip's price ceiling, and driver payments can be "optimized" by estimating the driver-trip's price floor. To be clear, I find this entire concept incredibly abhorrent, but apparently this is being trialed. [1] https://nakedsecurity.sophos.com/2017/04/10/uber-showing-drivers-and-riders-different-fare-estimates-says-lawsuit/ https://nakedsecurity.sophos.com/2017/04/10/uber-showing-dri...
- bonzini 9y ago
  It would not be abhorrent if it were the only source of income for Uber, which would basically be earning the bid-ask spread. Adding fees on top of that, though...
  - memmcgee 9y ago
    Except they also penalize drivers for not accepting many rides. So if you want to continue driving for Uber, you have to "sell" your driving services at some point, even if the price isn't good for you.
    - bonzini 9y ago
      Indeed, and that's an extension of "if it were the only source of income for Uber". If Uber proposed too high a spread, it's Uber that should be penalized. IOW it's not the spread mechanism that's wrong, it's everything on top of it.
    - mpeg 9y ago
      As well they should, otherwise it'd be impossible to get ubers from certain places or at certain times.
      - dullgiulio 9y ago
        Then Uber should pay drivers more in certain places at certain times. What is it, free market only works for Uber but not for the drivers?
- criddell 9y ago
  When I read about stuff like this and also how Uber is losing a lot of money, I have to wonder if maybe there's a fundamental problem with their business model.
  - mathattack 9y ago
    Their value isn't in the driver business, because eventually they'll just have to pay for the marginal cost of damage to the car. If they can optimize pricing between locations better than others, they'll win in the driverless world. (This drives the value, not the spread between what they pay and collect)
    - criddell 9y ago
      That makes sense. I think that also explains why they started their own driverless car program. Whatever company makes the first viable driverless cars, they may decide that rather than selling the cars, they will own them all and operate a ride-sharing service with them. Uber would be screwed.
  - leggomylibro 9y ago
    There is; they are hemorrhaging money, and only manage to stay afloat because of the billions of dollars being shoveled into the furnace by investors and nation-states. In a way, venture capital is subsidizing your rides. They're not insane, though. They're buying market share and betting that they can pull self-driving cars into their fleets while they still have the market on lock. Without having to pay drivers or deal with their whiny attempts to enforce employment laws (against an app! Crazy,) they see themselves being able to print money hand over foot. This is how you get away with being a dirtbag, in any situation. Move very quickly, and get to where you're going before anyone manages to claw you back far enough. Possession seems to be 100% of the law, when it comes to companies in this country.
    - aetherson 9y ago
      Let's be clear that "they're buying market share and betting that they can pull self-driving cars into their fleets" thing is revisionist history. Nobody who invested billions in Uber years ago was told, "Our plan is to burn your money and win driverless cars." They didn't even have a driverless car program until about two years ago. Uber thought that they had a viable business model based on human drivers, and that their markets would settle down into profitability once they established market share. They were wrong. They thought that they could successfully expand into a logistics business -- that was a big element of their redesign, which only landed 6 months ago, for god's sake. Now you never hear about logistics (because the only people who might conceivably want Uber-for-packages, Amazon, just went ahead and built the service in-house). So now they're saying that they're a big bet on driverless cars.
- bogomipz 9y ago
  Thanks for your link. I hadn't heard of this. So there will basically be no transparency to anyone involved in the transaction except Uber if this is adopted? The company seems to be guided by a culture of manipulation - manipulate the drivers with erroneous information, the riders with surge pricing, regulatory agencies with different screen views and now the possible manipulation of the bid ask spread. Uber just seems rotten to the core.
  - ddalex 9y ago
    Information asymmetry at its best, not that there is anything wrong with it. If Uber charges X for trip, and pays the driver Y for the service, it's obviously a taxi company. As such, I expect authorities to enforce the licensing laws, especially that the public support of Uber starts to diminish.
    - bogomipz 9y ago
      I completely agree with your points.
- ben_jones 9y ago
  Isn't this the future? Machine learning for everything? Just wait until some algorithm says 50:50 culture and diversity ratios aren't optimal [1]. [1]:https://m.xkcd.com/1838/ https://m.xkcd.com/1838/
- wnevets 9y ago
  >To be clear, I find this entire concept incredibly abhorrent why?
  - hasbroslasher 9y ago
    Some people have moral frameworks that always make seeking profits immoral. I'm not sure if that's what OP is saying, or merely that showing the driver and the passenger different rates and subtracting the difference (this is an approximation, not exactly what the post said) is shady and bad.
    - TeMPOraL 9y ago
      From previous HN discussions my impression is that the primary issue is with this charge being implicit. Uber already takes its money from drivers, and both drivers and users are participating in the program based on the assumption that what user is charged = what driver gets, minus Uber fee. But then it turns out that what user is charged more than Uber tells the driver (and from what it subtracts its fee), while the company also pockets the difference. This feels wrong.
  - potatolicious 9y ago
    Effective and fair markets rely on transparency, while this is the exact opposite - the deliberate creation of massive information asymmetry. Worse even, the information asymmetry isn't meant to favor one side of the transaction over the other (say, passengers over drivers), but is meant to favor the exchange (Uber) itself. Imagine if you went to your stock broker to buy 10 shares of XYZ. Your broker tells you that the market price is $100 per share, but in reality found a seller at $80/share and is pocketing the difference, without disclosing this to either party in the transaction. Besides the ethical shadiness of this kind of action, functioning markets are predicated on buyers and sellers having sufficient information, and the exchange behaving in consistent and transparent ways. This sort of double-dealing undermines it. Another poster snidely speculates that I may operate on a moral framework that finds profit-seeking intrinsically objectionable. This seems like a straw man that's intended to erase the difference between unfair market practices and fair market practices.
- rhizome 9y ago
  So by this they're just throwing "let's see if we can run an arbitrage on the concept of price sensitivity itself" against a wall and see who will fund it?
  - Applejinx 9y ago
    Yup. Wall Street will like everything about this, so the success or fail of it will be measured by 'can you survive if ONLY Wall Street likes you'.
    - rhizome 9y ago
      It would be fun to compile a corpus of economics and business books, distill them down to their major points, then throw them into a dack.com style permutation generator. Optionally, post every one as an "Ask HN," or whatever could be called "Etsy for angel funding."
- smogcutter 9y ago
  Bloomberg's Matt Levine on this: https://www.bloomberg.com/view/articles/2017-05-22/fitbit-quants-and-uber https://www.bloomberg.com/view/articles/2017-05-22/fitbit-qu... In a nutshell, uber is changing their business from charging a commission to acting more like a retailer: buy low (from drivers) and sell high (to passengers). The problem is that normally the two far ends of that transaction only ever interact with the middleman, but here they're literally sitting in the same car. Hard for both the buyer and seller not to feel (justifiably) ripped off when they can actually compare notes. Especially if even after their margin Uber is still taking a percentage of the driver's pay.
- Consultant32452 9y ago
  >To be clear, I find this entire concept incredibly abhorrent It's not clear to me why it's abhorrent. Doesn't every company optimize their vendors and customers separately?
- notyourwork 9y ago
  > abhorrent Is this not a business trying to maximize profit for itself? If you find this abhorrent than you must also despise capitalism because that is all this is. I may not personally like it as a consumer of their product but I find this to be a clever way to maximize profits for a middle man.
yeukhon 9y ago
You are not alone. I heard one just this past Sunday. He actually prefers Gett, then Lyft then finally Uber.
curun1r 9y ago
I've also had Lyft drivers tell me that they stopped driving for Uber after they didn't pay promised bonuses for meeting certain metrics and that Lyft was more reliable in that department. I don't know whether it's a coordinated effort by Lyft to disparage Uber or whether it's just a common thing that happens to Uber drivers, but I've had four drivers tell me that and two did it with almost no prompting.
- zem 9y ago
  it's unlikely to be a coordinated lyft effort because drivers can and do drive for both services. it's not in their interests to disparage uber if uber genuinely provides value for them; on the other hand if they left uber due to bad treatment it's probably very satisfying for them to tell their customers that.
speedplane 9y ago
Calling it an inadvertent bug is such a giant public relations fail. Uber should have said they're re-evaluating their payment plans to make sure drivers earn even more money, and for their driver's loyalty, they will make this pay increase retroactive.

rhcom2 9y ago

Hopefully he'll see some restitution too and it won't be only current drivers.

potatolicious 9y ago

What your driver was talking about may not be a bug/math error like stated here. After rolling out guaranteed whole-ride pricing (as opposed to metering) Uber is allegedly testing algorithms to bid different prices for rides to both driver and passenger. i.e., passenger sees a fare of $X, while driver sees a fare of $Y, where presumably $Y < $X. Passengers' fares can be "optimized" by estimating a specific passenger-trip's price ceiling, and driver payments can be "optimized" by estimating the driver-trip's price floor. To be clear, I find this entire concept incredibly abhorrent, but apparently this is being trialed. [1] https://nakedsecurity.sophos.com/2017/04/10/uber-showing-drivers-and-riders-different-fare-estimates-says-lawsuit/ https://nakedsecurity.sophos.com/2017/04/10/uber-showing-dri...

bonzini 9y ago
It would not be abhorrent if it were the only source of income for Uber, which would basically be earning the bid-ask spread. Adding fees on top of that, though...
- memmcgee 9y ago
  Except they also penalize drivers for not accepting many rides. So if you want to continue driving for Uber, you have to "sell" your driving services at some point, even if the price isn't good for you.
  - bonzini 9y ago
    Indeed, and that's an extension of "if it were the only source of income for Uber". If Uber proposed too high a spread, it's Uber that should be penalized. IOW it's not the spread mechanism that's wrong, it's everything on top of it.
  - mpeg 9y ago
    As well they should, otherwise it'd be impossible to get ubers from certain places or at certain times.
    - dullgiulio 9y ago
      Then Uber should pay drivers more in certain places at certain times. What is it, free market only works for Uber but not for the drivers?
criddell 9y ago
When I read about stuff like this and also how Uber is losing a lot of money, I have to wonder if maybe there's a fundamental problem with their business model.
- mathattack 9y ago
  Their value isn't in the driver business, because eventually they'll just have to pay for the marginal cost of damage to the car. If they can optimize pricing between locations better than others, they'll win in the driverless world. (This drives the value, not the spread between what they pay and collect)
  - criddell 9y ago
    That makes sense. I think that also explains why they started their own driverless car program. Whatever company makes the first viable driverless cars, they may decide that rather than selling the cars, they will own them all and operate a ride-sharing service with them. Uber would be screwed.
- leggomylibro 9y ago
  There is; they are hemorrhaging money, and only manage to stay afloat because of the billions of dollars being shoveled into the furnace by investors and nation-states. In a way, venture capital is subsidizing your rides. They're not insane, though. They're buying market share and betting that they can pull self-driving cars into their fleets while they still have the market on lock. Without having to pay drivers or deal with their whiny attempts to enforce employment laws (against an app! Crazy,) they see themselves being able to print money hand over foot. This is how you get away with being a dirtbag, in any situation. Move very quickly, and get to where you're going before anyone manages to claw you back far enough. Possession seems to be 100% of the law, when it comes to companies in this country.
  - aetherson 9y ago
    Let's be clear that "they're buying market share and betting that they can pull self-driving cars into their fleets" thing is revisionist history. Nobody who invested billions in Uber years ago was told, "Our plan is to burn your money and win driverless cars." They didn't even have a driverless car program until about two years ago. Uber thought that they had a viable business model based on human drivers, and that their markets would settle down into profitability once they established market share. They were wrong. They thought that they could successfully expand into a logistics business -- that was a big element of their redesign, which only landed 6 months ago, for god's sake. Now you never hear about logistics (because the only people who might conceivably want Uber-for-packages, Amazon, just went ahead and built the service in-house). So now they're saying that they're a big bet on driverless cars.
bogomipz 9y ago
Thanks for your link. I hadn't heard of this. So there will basically be no transparency to anyone involved in the transaction except Uber if this is adopted? The company seems to be guided by a culture of manipulation - manipulate the drivers with erroneous information, the riders with surge pricing, regulatory agencies with different screen views and now the possible manipulation of the bid ask spread. Uber just seems rotten to the core.
- ddalex 9y ago
  Information asymmetry at its best, not that there is anything wrong with it. If Uber charges X for trip, and pays the driver Y for the service, it's obviously a taxi company. As such, I expect authorities to enforce the licensing laws, especially that the public support of Uber starts to diminish.
  - bogomipz 9y ago
    I completely agree with your points.
ben_jones 9y ago
Isn't this the future? Machine learning for everything? Just wait until some algorithm says 50:50 culture and diversity ratios aren't optimal [1]. [1]:https://m.xkcd.com/1838/ https://m.xkcd.com/1838/
wnevets 9y ago
>To be clear, I find this entire concept incredibly abhorrent why?
- hasbroslasher 9y ago
  Some people have moral frameworks that always make seeking profits immoral. I'm not sure if that's what OP is saying, or merely that showing the driver and the passenger different rates and subtracting the difference (this is an approximation, not exactly what the post said) is shady and bad.
  - TeMPOraL 9y ago
    From previous HN discussions my impression is that the primary issue is with this charge being implicit. Uber already takes its money from drivers, and both drivers and users are participating in the program based on the assumption that what user is charged = what driver gets, minus Uber fee. But then it turns out that what user is charged more than Uber tells the driver (and from what it subtracts its fee), while the company also pockets the difference. This feels wrong.
- potatolicious 9y ago
  Effective and fair markets rely on transparency, while this is the exact opposite - the deliberate creation of massive information asymmetry. Worse even, the information asymmetry isn't meant to favor one side of the transaction over the other (say, passengers over drivers), but is meant to favor the exchange (Uber) itself. Imagine if you went to your stock broker to buy 10 shares of XYZ. Your broker tells you that the market price is $100 per share, but in reality found a seller at $80/share and is pocketing the difference, without disclosing this to either party in the transaction. Besides the ethical shadiness of this kind of action, functioning markets are predicated on buyers and sellers having sufficient information, and the exchange behaving in consistent and transparent ways. This sort of double-dealing undermines it. Another poster snidely speculates that I may operate on a moral framework that finds profit-seeking intrinsically objectionable. This seems like a straw man that's intended to erase the difference between unfair market practices and fair market practices.
rhizome 9y ago
So by this they're just throwing "let's see if we can run an arbitrage on the concept of price sensitivity itself" against a wall and see who will fund it?
- Applejinx 9y ago
  Yup. Wall Street will like everything about this, so the success or fail of it will be measured by 'can you survive if ONLY Wall Street likes you'.
  - rhizome 9y ago
    It would be fun to compile a corpus of economics and business books, distill them down to their major points, then throw them into a dack.com style permutation generator. Optionally, post every one as an "Ask HN," or whatever could be called "Etsy for angel funding."
smogcutter 9y ago
Bloomberg's Matt Levine on this: https://www.bloomberg.com/view/articles/2017-05-22/fitbit-quants-and-uber https://www.bloomberg.com/view/articles/2017-05-22/fitbit-qu... In a nutshell, uber is changing their business from charging a commission to acting more like a retailer: buy low (from drivers) and sell high (to passengers). The problem is that normally the two far ends of that transaction only ever interact with the middleman, but here they're literally sitting in the same car. Hard for both the buyer and seller not to feel (justifiably) ripped off when they can actually compare notes. Especially if even after their margin Uber is still taking a percentage of the driver's pay.
Consultant32452 9y ago
>To be clear, I find this entire concept incredibly abhorrent It's not clear to me why it's abhorrent. Doesn't every company optimize their vendors and customers separately?
notyourwork 9y ago
> abhorrent Is this not a business trying to maximize profit for itself? If you find this abhorrent than you must also despise capitalism because that is all this is. I may not personally like it as a consumer of their product but I find this to be a clever way to maximize profits for a middle man.

yeukhon 9y ago

You are not alone. I heard one just this past Sunday. He actually prefers Gett, then Lyft then finally Uber.

curun1r 9y ago

I've also had Lyft drivers tell me that they stopped driving for Uber after they didn't pay promised bonuses for meeting certain metrics and that Lyft was more reliable in that department. I don't know whether it's a coordinated effort by Lyft to disparage Uber or whether it's just a common thing that happens to Uber drivers, but I've had four drivers tell me that and two did it with almost no prompting.

zem 9y ago
it's unlikely to be a coordinated lyft effort because drivers can and do drive for both services. it's not in their interests to disparage uber if uber genuinely provides value for them; on the other hand if they left uber due to bad treatment it's probably very satisfying for them to tell their customers that.

speedplane 9y ago

Calling it an inadvertent bug is such a giant public relations fail. Uber should have said they're re-evaluating their payment plans to make sure drivers earn even more money, and for their driver's loyalty, they will make this pay increase retroactive.