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This happens to any platform using algorithmic pricing. Any time there is an unexpected event that either constrains supply or increases demand (or both), the

This happens to any platform using algorithmic pricing. Any time there is an unexpected event that either constrains supply or increases demand (or both), the algos go haywire. Then the the platform has to put in checks to prevent it from happening again. Remember when Uber was new and the surge pricing could do 20X+ in just a few minutes when there was an emergency? And then they had to fix it so that wouldn't happen, the trade off being that there just weren't cars available. The thing is, some people aren't price sensitive. In a sudden blizzard, some people are happy to pay $350 for a two mile ride home, just to get home. And some drivers are happy to go out in that weather for their piece of the $350. The hard question is how do you find the balance?

Y_Y 1y ago
The sellers are definitely price-sensitive though. The choice isn't between a $350 trip and a $20 one (because demand far outstrips supply at the point), it's $350 or no deal, or at best a lottery ticket to see if you're one of the lucky 5% of people who can get a ride at the old price. When the rate shoots up like this drivers will get a message, and plenty of them will get out of bed or stop whatever they're doing and get on the road. The platform will probably take a nice cut, but otherwise to meet demand they'd have to subsidise most of the difference. That would be some very expensive PR.
thaumasiotes 1y ago
> The thing is, some people aren't price sensitive. In a sudden blizzard, some people are happy to pay $350 for a two mile ride home, just to get home. And some drivers are happy to go out in that weather for their piece of the $350. > The hard question is how do you find the balance? Why is that a hard question? What balance are you looking to find?
- jedberg 1y ago
  Allowing those who are willing to pay any price to do so while still serving the community by not price gouging everyone, especially those who are price sensitive but are still desperate.
  - thaumasiotes 1y ago
    That is an incoherent, meaningless sentence. You think people should be allowed to pay high prices, but no one should be allowed to accept their money? What do you think it means to be allowed to pay for something?
  - adammarples 1y ago
    Don't high price signals in an efficient market serve the community by increasing supply? It's hard to argue that there's a better way to do it that doesn't inadvertently decrease the supply and instead become a lottery
    - redserk 1y ago
      I think this would rely on an assumption that there is always supply available to draw on. At some point there is no supply to alleviate the problem. Some effects may be dampened by new ride share drivers signing up, but even then, not everyone wants to be a driver regardless of compensation. I don’t know of a good approach to free-market around a supply limitation in the short-term.
      - hibikir 1y ago
        Prices cannot solve all supply problems. We cannot have 2 million teenagers dating the starlet-du-jour. But prices typically can increase the supply quite a bit, while most techniques that avoid prices will not increase supply at all. So if the goal is to maximize how many people get what they want, prices, plus some mechanism to avoid temporal speculation (for instance someone saving their sealed pokemon cards for 20 years hoping for price increases) makes the most sense.
        deleted 1y ago
        [deleted]
    - luckylion 1y ago
      That's unlikely for sudden and short-lived surges, isn't it? There probably won't be plenty of new rentals popping up in LA because of potentially high demand during the next wildfire.
renewiltord 1y ago
It happens all the time, actually. It's what happened to Gamestop. A few people really wanted the stock and the price just shot up. The worst was the Reddit IPO. The price just kept going up and the Reddit team sold stock at high prices instead of serving the community. It's just greed. People should not be allowed to sell except at the government-mandated price. Of course, a few million may starve, but that is a sacrifice I am willing to make in order to serve the community. Hopefully, we can make this Great Leap Forward in consumer rights, and prevent Late Stage Capitalism from having a Mask-Off Moment in AI slop enshittification. If you disagree, I'm begging you to read a book. Tell me you're enabling corporate interests to cause trauma without telling me you're enabling corporate interests to cause trauma.
- stingraycharles 1y ago
  Highly dependent upon circumstances, the government should really only regulate prices on a few things and that’s it (ie essential needs such as healthcare and energy, which is the case where I’m from). Having government mandated prices for everything is a very silly approach.
  - renewiltord 1y ago
    Another essential need is video games and Internet, without which most people cannot survive. Today's people also need access to the AI companion Ani part of the Grok 4 character suite built by x.ai. But we can solve the latter problem by just providing everyone with a $100k/year budget to spend on companionship. Mental health is health. Other platitudes available on demand. If you like, I can also use LLM to say such platitudes in the drawn out style of OP comment so that everyone can gather around and participate in game of Woe The Capitalist. Great enjoyment.
  - mike_hearn 1y ago
    The post you're replying to was being sarcastic.
    - stingraycharles 1y ago
deleted 1y ago
[deleted]
bko 1y ago
> The hard question is how do you find the balance? If only there were an entire field of study dedicated to matching supply and demand to maximize utility while encouraging efficient resource allocation...
eviks 1y ago
> The hard question is how do you find the balance? That's an easy question - you find the balance by letting people do what they want, then it automatically balances. Banning that, you can't find the balance because you've banned the mechanism that balances.
- Tadpole9181 1y ago
  Extorting an emergency and telling someone they either pay upwards of their entire life savings or die is not acceptable. There cannot be a free market in short term, life-changing moments there's no time or deliberation or competition that capitalism requires to find "balance".
  - eviks 1y ago
    > entire life savings or die is not acceptable Making stuff up for dramatic effect is also not an acceptable argument. > there's no time or deliberation or competition that capitalism requires to find "balance". That's not a requirement, but also there is time and all that- otherwise how did the people manage to use airbnb in the first place if they had no time? And you can deliberate for 5 minutes looking at a very high price and decide that you can temporarily stay in a much smaller place and further away than you wanted/used to. Or maybe move to your friends /relatives instead
    - Tadpole9181 1y ago
      The argument is there should be no balance, I am absolutely allowed to use worst-case. There is a reason it is illegal to price gouge water in emergency situations. That law, like many, is written in blood.
      - eviks 1y ago
        > The argument is there should be no balance. No, there is a balance, you've made up an argument > I am absolutely allowed to use worst-case. And I'm allowed to call out this faulty rhetoric > That law, like many, is written in blood That law, like many, is causing blood. It was the same thing with masks - instead of incentivizing people to drive far away to get masks from places of low demand and move them back to the city with high deficit, the FBI cracked down on gouging grounds, leaving people in cities exposed to the deadly virus without a mask.
more_corn 1y ago
So correct me if I’m wrong but Airbnb does not recommend a price. Theres no “algorithm” Nor do they review prices. You could post a place for $1million a night and they won’t notice or care. It just won’t get rented.
- jedberg 1y ago
  They recommend a price when you list, and they de-emphasize your property in listings if you don't fall within the recommendation.

Y_Y 1y ago

The sellers are definitely price-sensitive though. The choice isn't between a $350 trip and a $20 one (because demand far outstrips supply at the point), it's $350 or no deal, or at best a lottery ticket to see if you're one of the lucky 5% of people who can get a ride at the old price. When the rate shoots up like this drivers will get a message, and plenty of them will get out of bed or stop whatever they're doing and get on the road. The platform will probably take a nice cut, but otherwise to meet demand they'd have to subsidise most of the difference. That would be some very expensive PR.

thaumasiotes 1y ago

> The thing is, some people aren't price sensitive. In a sudden blizzard, some people are happy to pay $350 for a two mile ride home, just to get home. And some drivers are happy to go out in that weather for their piece of the $350. > The hard question is how do you find the balance? Why is that a hard question? What balance are you looking to find?

jedberg 1y ago
Allowing those who are willing to pay any price to do so while still serving the community by not price gouging everyone, especially those who are price sensitive but are still desperate.
- thaumasiotes 1y ago
  That is an incoherent, meaningless sentence. You think people should be allowed to pay high prices, but no one should be allowed to accept their money? What do you think it means to be allowed to pay for something?
- adammarples 1y ago
  Don't high price signals in an efficient market serve the community by increasing supply? It's hard to argue that there's a better way to do it that doesn't inadvertently decrease the supply and instead become a lottery
  - redserk 1y ago
    I think this would rely on an assumption that there is always supply available to draw on. At some point there is no supply to alleviate the problem. Some effects may be dampened by new ride share drivers signing up, but even then, not everyone wants to be a driver regardless of compensation. I don’t know of a good approach to free-market around a supply limitation in the short-term.
    - hibikir 1y ago
      Prices cannot solve all supply problems. We cannot have 2 million teenagers dating the starlet-du-jour. But prices typically can increase the supply quite a bit, while most techniques that avoid prices will not increase supply at all. So if the goal is to maximize how many people get what they want, prices, plus some mechanism to avoid temporal speculation (for instance someone saving their sealed pokemon cards for 20 years hoping for price increases) makes the most sense.
      - deleted 1y ago
        [deleted]
  - luckylion 1y ago
    That's unlikely for sudden and short-lived surges, isn't it? There probably won't be plenty of new rentals popping up in LA because of potentially high demand during the next wildfire.

renewiltord 1y ago

It happens all the time, actually. It's what happened to Gamestop. A few people really wanted the stock and the price just shot up. The worst was the Reddit IPO. The price just kept going up and the Reddit team sold stock at high prices instead of serving the community. It's just greed. People should not be allowed to sell except at the government-mandated price. Of course, a few million may starve, but that is a sacrifice I am willing to make in order to serve the community. Hopefully, we can make this Great Leap Forward in consumer rights, and prevent Late Stage Capitalism from having a Mask-Off Moment in AI slop enshittification. If you disagree, I'm begging you to read a book. Tell me you're enabling corporate interests to cause trauma without telling me you're enabling corporate interests to cause trauma.

stingraycharles 1y ago
Highly dependent upon circumstances, the government should really only regulate prices on a few things and that’s it (ie essential needs such as healthcare and energy, which is the case where I’m from). Having government mandated prices for everything is a very silly approach.
- renewiltord 1y ago
  Another essential need is video games and Internet, without which most people cannot survive. Today's people also need access to the AI companion Ani part of the Grok 4 character suite built by x.ai. But we can solve the latter problem by just providing everyone with a $100k/year budget to spend on companionship. Mental health is health. Other platitudes available on demand. If you like, I can also use LLM to say such platitudes in the drawn out style of OP comment so that everyone can gather around and participate in game of Woe The Capitalist. Great enjoyment.
- mike_hearn 1y ago
  The post you're replying to was being sarcastic.
  - stingraycharles 1y ago

deleted 1y ago

[deleted]

bko 1y ago

> The hard question is how do you find the balance? If only there were an entire field of study dedicated to matching supply and demand to maximize utility while encouraging efficient resource allocation...

eviks 1y ago

> The hard question is how do you find the balance? That's an easy question - you find the balance by letting people do what they want, then it automatically balances. Banning that, you can't find the balance because you've banned the mechanism that balances.

Tadpole9181 1y ago
Extorting an emergency and telling someone they either pay upwards of their entire life savings or die is not acceptable. There cannot be a free market in short term, life-changing moments there's no time or deliberation or competition that capitalism requires to find "balance".
- eviks 1y ago
  > entire life savings or die is not acceptable Making stuff up for dramatic effect is also not an acceptable argument. > there's no time or deliberation or competition that capitalism requires to find "balance". That's not a requirement, but also there is time and all that- otherwise how did the people manage to use airbnb in the first place if they had no time? And you can deliberate for 5 minutes looking at a very high price and decide that you can temporarily stay in a much smaller place and further away than you wanted/used to. Or maybe move to your friends /relatives instead
  - Tadpole9181 1y ago
    The argument is there should be no balance, I am absolutely allowed to use worst-case. There is a reason it is illegal to price gouge water in emergency situations. That law, like many, is written in blood.
    - eviks 1y ago
      > The argument is there should be no balance. No, there is a balance, you've made up an argument > I am absolutely allowed to use worst-case. And I'm allowed to call out this faulty rhetoric > That law, like many, is written in blood That law, like many, is causing blood. It was the same thing with masks - instead of incentivizing people to drive far away to get masks from places of low demand and move them back to the city with high deficit, the FBI cracked down on gouging grounds, leaving people in cities exposed to the deadly virus without a mask.

more_corn 1y ago

So correct me if I’m wrong but Airbnb does not recommend a price. Theres no “algorithm” Nor do they review prices. You could post a place for $1million a night and they won’t notice or care. It just won’t get rented.

jedberg 1y ago
They recommend a price when you list, and they de-emphasize your property in listings if you don't fall within the recommendation.