3 ms·

I agree with you. I guess I'm asking how likely is the (quite appealing) scenario you describe? The volume increase will more than offset the price drop -- oth

• AnthonyMouse 8y ago
  Predicting this kind of stuff is a rabbit hole. Suppose there is a strip of struggling restaurants downtown in an area with insufficient parking, so that your ride service is the best way to get there. If you lower prices by $.10/mile, you just lose money. If you lower prices by $.20/mile, the lower transportation cost allows the restaurants get enough new customers that they can make improvements, and then the restaurant improvements attract even more customers. Those customers are also your customers, and having many customers going to and from the same small area is your best case scenario because it allows you to pick up and drop off in the same place at the same time, so then you make more money too. It's generally easier to just try it and see what happens, and then deduce the how from the what. Note however that this will not necessarily be the same thing that happens in another area or at another time, because of all the things that can be different and affect the outcome.
  • _cs2017_ 8y ago
    If Uber was not reasonably confident in their predictive models, they'd be shifting rates by like 1% per week to test the waters, instead of 25% in a day. And if Uber can have good predictive models, maybe independent economists who study this market could make somewhat decent predictions as well.