4 ms·

That's the Uber argument. It makes logical sense but their customers don't get it. Uber has a reputation problem and failed to generate public goodwill. They'r

That's the Uber argument. It makes logical sense but their customers don't get it. Uber has a reputation problem and failed to generate public goodwill. They're the poster child of arrogant valley companies that everyone loves to hate. As logical as surge pricing is, it will be a hard sell until they win the people over. As a result there was no optimal way for them to respond in this situation. - Disable automated surge pricing, less cars on the street, less people home quickly - Remain silent about automatic surge pricing, guaranteed backlash, more cars on the street Instead they tried to get ahead of the backlash. Maintains their strategy, gets more people home, paints a huge target on their backs for everyone who hates them.

mseebach 12y ago
Haters gonna hate. I think you're arguing from a very narrow perspective, the vast, vast majority of Uber's users wouldn't know a "valley company" if it walked up an introduced it self, much less "love to hate" it. You're right that surge pricing is a counterintuitive concept for many people to accept, and it's a major gamble, but let's not confuse the HN filter bubble with the millions of people who actually use, and keep using, Uber.
- abandonliberty 12y ago
  I didn't realize that legislators all over the world were part of the HN filter bubble. Or, you know, most journalists. http://reason.com/blog/2014/11/23/forget-ubers-asshole-problem-the-company http://reason.com/blog/2014/11/23/forget-ubers-asshole-probl...
vacri 12y ago
Jacking up prices in response to a humanitarian problem is called 'profiteering'. It is economically sound, but it's not ethical. If they want to show it worked, they should release numbers - proportionately how many uber drivers were 'enticed' back onto the roads? Show people that it actually works, rather than wave hands around saying 'mutter mutter logic mutter mutter save lives'.
- calbear81 12y ago
  I challenge the contention that it's profiteering because of the potential for the price increase to ease macro demand and supply challenges. It's a different case with something like bottled water since that has a fixed supply, jacking up the price does nothing to increase the availability of more bottled water in a short period of time.
- wutbrodo 12y ago
  Profiteering is generally applied to cases where allocative efficiency is increased (those who are willing to pay the most are used as a rough proxy for those who need it the most). That's where the "economically sound but unethical" thing comes in, since you're not actually providing any more of the direly needed good, you're just shifting around who gets it. In this case, raising prices is pretty much directly increasing supply, which is a net good for everyone (you're avoiding the case where someone wants to pay X and someone wants to sell for X but there's no avenue to do so). Agreed that from a PR perspective for those who can't grasp simple economics, they should release their data on surge factor vs drivers on the road.
  - vacri 12y ago
    "directly increasing supply" - this is why I say they should say how effective it was. If a 4x price increase increased supply by 2%, that doesn't sound very effective.
- josu 12y ago
  > It is economically sound, but it's not ethical. In this case on the one hand you have people desperately trying to leave a place, and on the other hand you have drivers sitting at home not wanting to risk their lives for $x/mile. When Uber jacks up prices, you are creating incentives for those drivers to get out of their homes and start allowing people to desperately leave the places where they don't want to be in. Highers prices>More drivers>More people leaving the dangerous places There is nothing ethically wrong with it. I could even argue that the unethical thing would be not to jack up prices, since this would put less cars on the streets and consequently less people would be "rescued".
wutbrodo 12y ago
> As a result there was no optimal way for them to respond in this situation. The optimal way from a user's perspective would be to let surge pricing do what it does. The optimal way from a PR perspective would've been to cap surge pricing (the hysterical lunatics currently screaming about this on Twitter et al would have a lot more trouble getting people to blame Uber for "there's not enough Ubers around!"). It seems in this case Uber chose what was optimal for users, and they were vilified for it. Now obviously I'm talking about a sustainable optimal solution: what they ended up doing (free rides and refunds) is the most optimal for users but obviously not a steady-state solution (at the very least it would require them to keep tabs on every situation that might be considered an emergency and devote time to classifying those: everything from strong weather events to more anomalous things like the current hostage situation).
- dllthomas 12y ago
  Further, the "refund you after the fact" opens people up to the risk that they believe an event will motivate free rides when in fact it fails to. Definitely tough. That said, "at the very least it would require them to keep tabs on every situation that might be considered an emergency and devote time to classifying those: everything from strong weather events to more anomalous things like the current hostage situation" You mean a 50B company with the ability to massively shift allocation of resources needs to pay attention to what's going on in the world, to deploy such resources effectively and ethically?
  - mikeash 12y ago
    There's a tendency among programmers to reject any solution that requires O(n) human work. Either automate it or don't do it at all. This seems to drive Google's approach (or non-approach) to customer service, as an example, and also leads to a lot of "why didn't I think of that?" moments when some company figures out they can make a lot of money without automation. (For a good example of the latter, look at all the attempts at electronic bill pay that tried and failed because of network effects before somebody finally realized that they could bridge the gap by mailing checks to anyone who wasn't yet in the system.) Here, there's an inherent resistance to anything that would require Uber to deploy humans in a way that scales linearly with their business. Surge pricing can be automated, so it's OK. Modifying surge pricing based on the nature of current events requires a number of people that increases linearly with the number of locales that Uber serves, so it gets rejected.

mseebach 12y ago

Haters gonna hate. I think you're arguing from a very narrow perspective, the vast, vast majority of Uber's users wouldn't know a "valley company" if it walked up an introduced it self, much less "love to hate" it. You're right that surge pricing is a counterintuitive concept for many people to accept, and it's a major gamble, but let's not confuse the HN filter bubble with the millions of people who actually use, and keep using, Uber.

abandonliberty 12y ago
I didn't realize that legislators all over the world were part of the HN filter bubble. Or, you know, most journalists. http://reason.com/blog/2014/11/23/forget-ubers-asshole-problem-the-company http://reason.com/blog/2014/11/23/forget-ubers-asshole-probl...

vacri 12y ago

Jacking up prices in response to a humanitarian problem is called 'profiteering'. It is economically sound, but it's not ethical. If they want to show it worked, they should release numbers - proportionately how many uber drivers were 'enticed' back onto the roads? Show people that it actually works, rather than wave hands around saying 'mutter mutter logic mutter mutter save lives'.

calbear81 12y ago
I challenge the contention that it's profiteering because of the potential for the price increase to ease macro demand and supply challenges. It's a different case with something like bottled water since that has a fixed supply, jacking up the price does nothing to increase the availability of more bottled water in a short period of time.
wutbrodo 12y ago
Profiteering is generally applied to cases where allocative efficiency is increased (those who are willing to pay the most are used as a rough proxy for those who need it the most). That's where the "economically sound but unethical" thing comes in, since you're not actually providing any more of the direly needed good, you're just shifting around who gets it. In this case, raising prices is pretty much directly increasing supply, which is a net good for everyone (you're avoiding the case where someone wants to pay X and someone wants to sell for X but there's no avenue to do so). Agreed that from a PR perspective for those who can't grasp simple economics, they should release their data on surge factor vs drivers on the road.
- vacri 12y ago
  "directly increasing supply" - this is why I say they should say how effective it was. If a 4x price increase increased supply by 2%, that doesn't sound very effective.
josu 12y ago
> It is economically sound, but it's not ethical. In this case on the one hand you have people desperately trying to leave a place, and on the other hand you have drivers sitting at home not wanting to risk their lives for $x/mile. When Uber jacks up prices, you are creating incentives for those drivers to get out of their homes and start allowing people to desperately leave the places where they don't want to be in. Highers prices>More drivers>More people leaving the dangerous places There is nothing ethically wrong with it. I could even argue that the unethical thing would be not to jack up prices, since this would put less cars on the streets and consequently less people would be "rescued".

wutbrodo 12y ago

> As a result there was no optimal way for them to respond in this situation. The optimal way from a user's perspective would be to let surge pricing do what it does. The optimal way from a PR perspective would've been to cap surge pricing (the hysterical lunatics currently screaming about this on Twitter et al would have a lot more trouble getting people to blame Uber for "there's not enough Ubers around!"). It seems in this case Uber chose what was optimal for users, and they were vilified for it. Now obviously I'm talking about a sustainable optimal solution: what they ended up doing (free rides and refunds) is the most optimal for users but obviously not a steady-state solution (at the very least it would require them to keep tabs on every situation that might be considered an emergency and devote time to classifying those: everything from strong weather events to more anomalous things like the current hostage situation).

dllthomas 12y ago
Further, the "refund you after the fact" opens people up to the risk that they believe an event will motivate free rides when in fact it fails to. Definitely tough. That said, "at the very least it would require them to keep tabs on every situation that might be considered an emergency and devote time to classifying those: everything from strong weather events to more anomalous things like the current hostage situation" You mean a 50B company with the ability to massively shift allocation of resources needs to pay attention to what's going on in the world, to deploy such resources effectively and ethically?
- mikeash 12y ago
  There's a tendency among programmers to reject any solution that requires O(n) human work. Either automate it or don't do it at all. This seems to drive Google's approach (or non-approach) to customer service, as an example, and also leads to a lot of "why didn't I think of that?" moments when some company figures out they can make a lot of money without automation. (For a good example of the latter, look at all the attempts at electronic bill pay that tried and failed because of network effects before somebody finally realized that they could bridge the gap by mailing checks to anyone who wasn't yet in the system.) Here, there's an inherent resistance to anything that would require Uber to deploy humans in a way that scales linearly with their business. Surge pricing can be automated, so it's OK. Modifying surge pricing based on the nature of current events requires a number of people that increases linearly with the number of locales that Uber serves, so it gets rejected.