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This is a feature, not a bug. :) Uber has created a market with dynamic pricing, but manages to keep both ends of the transaction in the dark until the last pos

by aristus 12y ago

This is a feature, not a bug. :) Uber has created a market with dynamic pricing, but manages to keep both ends of the transaction in the dark until the last possible moment. This information asymmetry is precisely why they are making money hand over fist.

harryh 12y ago
I don't understand why this information asymmetry is more important to their profits than the network effect of controlling a very widely used marketplace?
- aristus 12y ago
  Think ebay and all its network effect pixie dust, plus the ability to name your own price.
  - harryh 12y ago
    What percentage of Uber's revenue comes from surge pricing?
- omonra 12y ago
  I'm with you. I think it's probably one of the 'things that could work better' but unlikely something the company makes much money from.
aik 12y ago
It's a feature, and why passengers didn't even bother. It's a dangerous game. With the cost of ride essentially being an unknown, ranging from cheaper than a cab to many times the cost of a cab, I often wouldn't bother either. People prefer consistency in what they pay for an experience, and when it's inconsistent, I lose trust that the value will be consistent (ie. Uber for most people I believe is attractive if the experience is better or equal in cost to a cab, but terrible when the cost is significantly higher than the convenience/better experience.) At least with a cab I am (fairly) certain of the value.
- erok 12y ago
  It's a "feature". :P In the same way that it is a feature that the cab driver doesn't have a permit or the proper insurance. Is this really how the new blackmarket is going to work? Do something illegal nationwide with average citizens running it and you are good to go? Maybe I am just being negative. Sorry.
yuliyp 12y ago
It's a feature that optimizes for short term profit at the expense of the long term: memory of last year served to reduce demand this year, and memory of this year will serve to reduce supply in the future. Part of me wonders if they didn't tweak the surge multipliers in a misguided effort to appease drivers' expectations.
- didddler 12y ago
  It appears that they tweaked surge to appease drivers, here's a conversation between an Uber driver and Uber's head of global operations. http://imgur.com/yG5Ny1Q http://imgur.com/yG5Ny1Q It's all speculative because how they implement surge is opaque.
nerfhammer 12y ago
Given that supply and quantity demanded seemed badly mismatched this seems like a failure of the pricing mechanism, one which would not occur in a free market

by aristus 12y ago

harryh 12y ago

I don't understand why this information asymmetry is more important to their profits than the network effect of controlling a very widely used marketplace?

aristus 12y ago
Think ebay and all its network effect pixie dust, plus the ability to name your own price.
- harryh 12y ago
  What percentage of Uber's revenue comes from surge pricing?
omonra 12y ago
I'm with you. I think it's probably one of the 'things that could work better' but unlikely something the company makes much money from.

aik 12y ago

It's a feature, and why passengers didn't even bother. It's a dangerous game. With the cost of ride essentially being an unknown, ranging from cheaper than a cab to many times the cost of a cab, I often wouldn't bother either. People prefer consistency in what they pay for an experience, and when it's inconsistent, I lose trust that the value will be consistent (ie. Uber for most people I believe is attractive if the experience is better or equal in cost to a cab, but terrible when the cost is significantly higher than the convenience/better experience.) At least with a cab I am (fairly) certain of the value.

erok 12y ago
It's a "feature". :P In the same way that it is a feature that the cab driver doesn't have a permit or the proper insurance. Is this really how the new blackmarket is going to work? Do something illegal nationwide with average citizens running it and you are good to go? Maybe I am just being negative. Sorry.

yuliyp 12y ago

It's a feature that optimizes for short term profit at the expense of the long term: memory of last year served to reduce demand this year, and memory of this year will serve to reduce supply in the future. Part of me wonders if they didn't tweak the surge multipliers in a misguided effort to appease drivers' expectations.

didddler 12y ago
It appears that they tweaked surge to appease drivers, here's a conversation between an Uber driver and Uber's head of global operations. http://imgur.com/yG5Ny1Q http://imgur.com/yG5Ny1Q It's all speculative because how they implement surge is opaque.

nerfhammer 12y ago

Given that supply and quantity demanded seemed badly mismatched this seems like a failure of the pricing mechanism, one which would not occur in a free market