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Charging able-to-pay people more is called "price segmentation" and is quite common... but it usually happens by adding some sort of features at a (much) higher

Charging able-to-pay people more is called "price segmentation" and is quite common... but it usually happens by adding some sort of features at a (much) higher margin rather than by price discrimination on exact same product. The difference between letting folks opt-in to a more overpriced service versus selecting it for them is huge, because it centralizes all the economic choices in Uber HQ. Uber knows you will pay more, but does it know that you have 5 kids to support with what's left over? Or that your costs come out of a non-profit budget? Or that your need for rides is associated with disastrous new medical expenses? These concerns are built into our tax code, but Uber doesn't have the interest or ability to align with any kind of moral consensus about what "able to pay" should really mean... they just have a lot of insight into what you're willing to pay for rides. Early on, Uber was championed in some circles as a good example of technology enabling a two sided market to compete with highly centralized industries. Over time, they've stopped being a market, and insisted on becoming a broker that keeps both sides at an information disadvantage. This is a good way to collect rents, not to drive competitive service.

mi100hael 9y ago
The funny thing is that Uber already has segmentation with their Black cars. Presumably if someone's on an expense account and doesn't give a fuck about price, they'd be using that service. I think this isn't so much segmentation as it is simply extracting more money from people who probably aren't going to bother looking for alternatives like Lyft or a vanilla cab.
- xeromal 9y ago
  The black cars cost much more, but when there's chaos at an airport, the black cars are much easier to get from what I've seen. You're definitely right, the people who don't care or value their time more will choose black.
Anderkent 9y ago
Price segmentation often happens not by adding features to the high end pricing, but removing them from low end prices, even at extra cost. Think CPUs shipping with disabled cores, etc.
- civilitty 9y ago
  You've got the cause and effect backwards. CPUs ship with disabled cores because that's the only way to recover from manufacturing errors that would otherwise make that segment of the wafer completely useless. Instead of scratches and misplaced dopants costing Intel the full price of a $500 i7, they disable the damaged silicon and sell it as a cheaper i3 or i5. It's literally the only way to make modern CPUs economical and the price discrimination is more of a consequence of physical phenomena. Likewise with RAM clockspeeds: each chip is "burned in" during fab and the most stable ones (with the fewest imperfections) are sold as overclocked RAM while the worst are sold as underclocked low power mobile chips. If you don't care at all about cost (aka yield), like with RAD hardened CPUs or high throughput serial processors like those from IBM, there is no real room for discrimination and you just pay for the NRE/fabrication plus a profit for the vendor.

mi100hael 9y ago

The funny thing is that Uber already has segmentation with their Black cars. Presumably if someone's on an expense account and doesn't give a fuck about price, they'd be using that service. I think this isn't so much segmentation as it is simply extracting more money from people who probably aren't going to bother looking for alternatives like Lyft or a vanilla cab.

xeromal 9y ago
The black cars cost much more, but when there's chaos at an airport, the black cars are much easier to get from what I've seen. You're definitely right, the people who don't care or value their time more will choose black.

Anderkent 9y ago

Price segmentation often happens not by adding features to the high end pricing, but removing them from low end prices, even at extra cost. Think CPUs shipping with disabled cores, etc.

civilitty 9y ago
You've got the cause and effect backwards. CPUs ship with disabled cores because that's the only way to recover from manufacturing errors that would otherwise make that segment of the wafer completely useless. Instead of scratches and misplaced dopants costing Intel the full price of a $500 i7, they disable the damaged silicon and sell it as a cheaper i3 or i5. It's literally the only way to make modern CPUs economical and the price discrimination is more of a consequence of physical phenomena. Likewise with RAM clockspeeds: each chip is "burned in" during fab and the most stable ones (with the fewest imperfections) are sold as overclocked RAM while the worst are sold as underclocked low power mobile chips. If you don't care at all about cost (aka yield), like with RAD hardened CPUs or high throughput serial processors like those from IBM, there is no real room for discrimination and you just pay for the NRE/fabrication plus a profit for the vendor.