Uber are communists

[TA1LGUNN3R]

if i'm assaulted in a yellow cab, i'm suing the f*ck out of yellow cab and it's employee...

Yes, because it's clearly the cab company's fault that you're an asshole.

nope, because they license the drivers and are accountable for their actions... my being an asshole has nothing to do with it... i'm sure every single time you have been punched in the mouth (you have probably lost count by now), you went after the place of biz where it happened... wait... i guess playgrounds probably don't have "owners" that you can sue... oh well...-Jésus noir

--Andy

Ooh Deanna Troi

+1

-TG

[subtleknifewield]

Stil not a monopoly when there are plenty of other transport options available.

[Bernie Sanders]

Uber is safe. Used Uber twice and my family has used their services multiple times the last couple of months. Called Uber and the driver sent a picture of him/her and type of vehicle and License number.

I paid a bit more, but the service was prompt and the driver was polite with a super clean vehicle.

Not sure about the ridiculous debate on whether Uber is communist or capitalist, but carry on.

[Metsfanmax]

'Using an Uber has greater utlity than walking home' may well be true but that's not the point. The price hikes decrease utility compared to the price before the hike, and the hike is imposed on drivers who may well not make hikes of their own volition.

They don't just increase prices whenever they feel like it. They increase prices in times of high demand. When there's higher demand, it's harder to get a ride (it takes longer, if you can even get one). Your point only makes sense if you consider the utility only of the people who actually get the rides, which is an incomplete perspective. You need to consider everyone in the market. By increasing the price, the rides go to the people who are willing to pay more for the rides, and therefore presumably need them more. So the market is actually using the price to direct an efficient allocation of goods -- as it should. Therefore the price hikes actually increase total utility.

Repeatedly making goods more expensive until you have identified the people who are willing to pay the most for your constricted supply of goods is not a way to effectively allocate resources.

It is pretty much the definition of the market system. If you supply a product, you continue raising the price until the marginal expected income would become negative, which occurs when raising the price further would lose more income from customers leaving than would be gained from the increased price per item. Hence every supply and demand curve ever. In the most optimal market system, you pick the price that maximizes your returns, you don't pick an arbitrary price. You're asking Uber to pick an arbitrary price to make some people happy rather than picking the price which maximizes their returns, which is micro-economic nonsense.

Your system is a pretty textbook example of a deadweight loss, the inefficiencies of which I might as well just let Wikipedia explain:

Consider a market for nails where the cost of each nail is 10 cents and the demand will decrease linearly from a high demand for free nails to zero demand for nails at $1.10. In a perfectly competitive market, producers would have to charge a price of 10 cents and every customer whose marginal benefit exceeds 10 cents would have a nail. However, if there is one producer who has a monopoly on the product, then they will charge whatever price will yield the greatest profit. For this market, the producer would charge 60 cents and thus exclude every customer who had less than 60 cents of marginal benefit. The deadweight loss is then the economic benefit foregone by these customers due to the monopoly pricing.

Obviously this doesn't apply, because the underlying assumption in the defense of Uber is that there will always be competitors, who will be used in the event that Uber makes their price too high. Even if Uber is the only firm in the market and therefore has a monopoly, that doesn't mean the concept of deadweight loss applies in a useful form that helps guide price-setting. Deadweight loss is a relative concept, that says that a monopoly situation well always produce less utility than a perfectly competitive market, which is of course true. But if Uber is in a situation where it is effectively a monopoly, utility is still maximized by the scheme I described under those constraints. If we lift constraints and add competitors to the market then societal utility would be increased further, but that's not Uber's job. All this concept says is that it's better to have a competitive market than a non-competitive market -- but if you have a non-competitive market, there is still a price which maximizes total utility. Deadweight loss doesn't help guide anyone's individual microeconomic decisions, it's a collective effect which can maybe only be directly useful to policymakers.

A simple example of why utility can still be maximized with surge pricing given constraints of extremely limited supply is illustrated by the cases in the US where surge pricing has caused the highest amount of furor -- after natural disasters. Who are the people that most seriously need a car ride after a natural disaster? I don't know exactly, but as a typical example consider someone who's grandmother is alone and trapped and needs help, but the police can't get to her quickly. That person will pay a lot of money to get across town quickly. Now consider just some typical middle-class person who happened to be shopping at Macy's and wants to get home. They might not want to pay $100 to avoid the inconvenience of waiting until the subway comes back online, but the person with the dying grandmother absolutely will pay that. It's a great sin if the person can't save his grandmother because someone wanted to get home and read by the fireplace.

I never once had a problem getting a reasonably priced ride home in Beijing. The demand for cheap rides is there and the supply of drivers willing to offer those cheap rides is there. Price floors kill that section of the market and offer nothing in return. The answer is to deregulate the taxi industry, not run a constricted, over-priced one.

I don't know who you think the God of the market is here, but none of us have the power to "deregulate the taxi industry." Uber is doing what it can with the constraints available. If anything, the existence of Uber is what will most likely cause loosened taxi regulations.

[mrswdk]

It is pretty much the definition of the market system. If you supply a product, you continue raising the price until the marginal expected income would become negative, which occurs when raising the price further would lose more income from customers leaving than would be gained from the increased price per item. Hence every supply and demand curve ever. In the most optimal market system, you pick the price that maximizes your returns, you don't pick an arbitrary price. You're asking Uber to pick an arbitrary price to make some people happy rather than picking the price which maximizes their returns, which is micro-economic nonsense.

No I'm not. I'm asking for a system in which the only people involved in determining the price are the passenger and the driver.

Obviously this doesn't apply, because the underlying assumption in the defense of Uber is that there will always be competitors, who will be used in the event that Uber makes their price too high. Even if Uber is the only firm in the market and therefore has a monopoly, that doesn't mean the concept of deadweight loss applies in a useful form that helps guide price-setting. Deadweight loss is a relative concept, that says that a monopoly situation well always produce less utility than a perfectly competitive market, which is of course true. But if Uber is in a situation where it is effectively a monopoly, utility is still maximized by the scheme I described under those constraints.

If Uber operates a monopoly with restricted supply then that is a systemic problem, for reasons I've already pointed out, and all the surge pricing in the world use won't solve that.

I never once had a problem getting a reasonably priced ride home in Beijing. The demand for cheap rides is there and the supply of drivers willing to offer those cheap rides is there. Price floors kill that section of the market and offer nothing in return. The answer is to deregulate the taxi industry, not run a constricted, over-priced one.

I don't know who you think the God of the market is here, but none of us have the power to "deregulate the taxi industry." Uber is doing what it can with the constraints available. If anything, the existence of Uber is what will most likely cause loosened taxi regulations.

Just saying that the aim should be to deregulate the taxi industry. Having Uber fixing prices is no better than having the City of London Corporation fixing prices.

As I have already mentioned several times, even where black cab drivers in Beijing attempt to apply the principal of 'surge pricing', others will just come along and undercut them anyway. Regulated, price-fixed taxi rings have nothing to offer and there is no reason for them to exist.

[warmonger1981]

How about this one. Driverless cars.

http://www.theguardian.com/technology/2 ... re-of-uber

http://www.cnbc.com/2015/02/03/uber-to- ... lenge.html

[Metsfanmax]

No I'm not. I'm asking for a system in which the only people involved in determining the price are the passenger and the driver.

But you should be careful about that, because it won't necessarily lead to the lowest price. You're falling victim to the anchoring effect. You've established a baseline in your head of a reasonable taxi price, and when surge pricing comes along, it it makes the baseline price look quite reasonable indeed. So you aren't stopping to ask whether it could be cheaper than it already is. And prices do get cheaper when you can profit from economics of scale. Hence why prices are so low at Wal-Mart. You're asking for the analogue to the return of the days without any supermarkets -- you're going to pay more.

If Uber operates a monopoly with restricted supply then that is a systemic problem, for reasons I've already pointed out, and all the surge pricing in the world use won't solve that.

If there is limited supply then that is a market failure, or the result of government policy, but again it's not an argument against Uber doing what it can to maximize utility given the constraints of the system it's in. If you want to increase utility then you need to establish an Uber competitor, not bitch about the limited supply and ask Uber to charge lower prices simply because it would do so in a more competitive environment.

Just saying that the aim should be to deregulate the taxi industry.

The aim of who?

Having Uber fixing prices is no better than having the City of London Corporation fixing prices.

False equivalence. Uber's "fixed" prices might be lower than the City of London's, and there are plenty of Uber drivers around, so it's strictly better than not having Uber around -- people get fewer rides, and they pay a higher price, and they don't have the convenience of the cell phone app. Increased choice is always better for the consumer.

Maybe the system you described, an app that only connects car and driver and doesn't set payments, is a more efficient system in the long run. But it's not obvious, for the reasons mentioned above, and others (consider what is happening in some places where it is argued that Uber drivers are employees).

As I have already mentioned several times, even where black cab drivers in Beijing attempt to apply the principal of 'surge pricing', others will just come along and undercut them anyway. Regulated, price-fixed taxi rings have nothing to offer and there is no reason for them to exist.

OK, so? If Uber is priced out of the industry or forced to change price structure when competitors enter the market, so be it. But if there is a limited supply of competitors, you can sure bet that they're going to enforce surge pricing if it makes them money.

[Metsfanmax]

Uber is safe. Used Uber twice and my family has used their services multiple times the last couple of months. Called Uber and the driver sent a picture of him/her and type of vehicle and License number.

I paid a bit more, but the service was prompt and the driver was polite with a super clean vehicle.

Not sure about the ridiculous debate on whether Uber is communist or capitalist, but carry on.

Fail. Bernie Sanders has publicly expressed contempt for Uber, and said that it is unsafe because it is not regulated.

[mrswdk]

I'm asking for a system in which the only people involved in determining the price are the passenger and the driver.

But you should be careful about that, because it won't necessarily lead to the lowest price.

Haggling in China, always got a good deal, never had to choose between either a surge-priced taxi or another mode of transport, system was 100% fit for purpose. Please pay attention.

None of what you're saying disproves that the presence of unregulated competitors would be good for that market and that Uber is a bullshit alternative to that, which is my point.

[Metsfanmax]

I'm asking for a system in which the only people involved in determining the price are the passenger and the driver.

But you should be careful about that, because it won't necessarily lead to the lowest price.

Haggling in China, always got a good deal, never had to choose between either a surge-priced taxi or another mode of transport, system was 100% fit for purpose. Please pay attention.

OK but the rest of that paragraph was my response to that, so I'm just going to wait until you read it and respond to it.

None of what you're saying disproves that the presence of unregulated competitors would be good for that market and that Uber is a bullshit alternative to that, which is my point.

Uber is the unregulated competitor you are talking about. Like other franchises, they set franchise-wide prices for services. That doesn't mean that they are "bullshit." It means they work like every other major corporation. If their pricing model doesn't work for people, they'll lose market share. If it does, then they won't. The beautiful thing about the market is that people can vote with their wallets, and we don't need mrswdk or anyone else to attempt to figure out from the armchair whether Uber has a good model or not.

And, of course, I have acknowledged that more competitors are always better for consumers. I just denied your claim that Uber is somehow exceptional to this class of taxi alternatives. Certainly the way to improve consumer utility is to add more competitors to Uber, not to shut down Uber.

[mrswdk]

I'm asking for a system in which the only people involved in determining the price are the passenger and the driver.

But you should be careful about that, because it won't necessarily lead to the lowest price.

Haggling in China, always got a good deal, never had to choose between either a surge-priced taxi or another mode of transport, system was 100% fit for purpose. Please pay attention.

OK but the rest of that paragraph was my response to that, so I'm just going to wait until you read it and respond to it.

Uh?

You've established a baseline in your head of a reasonable taxi price, and when surge pricing comes along, it it makes the baseline price look quite reasonable indeed. So you aren't stopping to ask whether it could be cheaper than it already is. And prices do get cheaper when you can profit from economics of scale. Hence why prices are so low at Wal-Mart. You're asking for the analogue to the return of the days without any supermarkets -- you're going to pay more.

Wrong, because with an unregulated system of black cabs in Beijing I did not end up paying more for my journeys than I would if I'd only ever used city taxis. I see no reason to assume that a system of unregulated black cabs in London or New York would be any different.

None of what you're saying disproves that the presence of unregulated competitors would be good for that market and that Uber is a bullshit alternative to that, which is my point.

Uber is the unregulated competitor you are talking about. Like other franchises, they set franchise-wide prices for services.

Exactly. It's a franchise, issuing set prices that all of it's registered taxi drivers have to follow. The ideal form of competition - unregulated independent drivers - is outlawed in the UK and so Uber is shielded from ever having to compete with them.

That doesn't mean that they are "bullshit." It means they work like every other major corporation. If their pricing model doesn't work for people, they'll lose market share. If it does, then they won't. The beautiful thing about the market is that people can vote with their wallets

That's the great thing about a free market, yes. However, a system in which only licensed people are able to operate a taxi is not a free market.

I'd gladly download a UK taxi app which does nothing more than hail a car for me, and I suspect many others would too, but given how tightly regulated the UK is I won't hold my breath for that app to ever get made.

[Metsfanmax]

You've established a baseline in your head of a reasonable taxi price, and when surge pricing comes along, it it makes the baseline price look quite reasonable indeed. So you aren't stopping to ask whether it could be cheaper than it already is. And prices do get cheaper when you can profit from economics of scale. Hence why prices are so low at Wal-Mart. You're asking for the analogue to the return of the days without any supermarkets -- you're going to pay more.

Wrong, because with an unregulated system of black cabs in Beijing I did not end up paying more for my journeys than I would if I'd only ever used city taxis. I see no reason to assume that a system of unregulated black cabs in London or New York would be any different.

Consider the following scenario -- Uber moves into Beijing (ha). Suppose there is some route you often need to travel that typically costs you 60 yuan, when you establish the price with the black cab drivers. Uber, due to its economies of scale, can offer this same route for 55 yuan on a normal day. However, 20% of the time when you take this route, it costs 70 yuan due to surge pricing -- but the black cabs hold steady and still charge 60 yuan even in this circumstance. Your situation is strictly improved, because on normal days you can take the cheaper fare, and on surge pricing days you can take the competitors. You should want Uber to compete in this market.

The only way to deny this is to assert that Uber does not gain anything from economies of scale, which I think would be rather hard to defend.

Exactly. It's a franchise, issuing set prices that all of it's registered taxi drivers have to follow. The ideal form of competition - unregulated independent drivers - is outlawed in the UK and so Uber is shielded from ever having to compete with them.

That's not necessarily the ideal form of competition. The reason it may not obtain optimal prices is because the prices may not be perfectly displayed, so that people in the market do not have complete information. If I have to wait until the driver shows up and talk to them in person to figure out their price, I very likely may end up getting a slightly worse deal. Perhaps a better compromise would be for you to select, in the app, what fare you would pay for a given route, and let drivers determine if they would accept that fare. If no one accepts, then you lower your fare until some driver takes the deal.

Also, again consider the economies of scale argument. It's not clear to me that 100 small-time competitors can get the price lower than one Wal-Mart. Someone with more training in micro than me would have to get involved. But there are some easy to perceive reasons why this might be true. For example, credit card fees could very well be negotiated as a lower bulk rate for Uber than for the individual drivers.

[mrswdk]

Uber has moved into Beijing, it's just nowhere near as prevalent there. I used an app called Kuaidi Dache when I was in China. The other big one was Didi Dache. I also just took phone numbers of good drivers so that I could call that specific driver up if I wanted them.

That's not necessarily the ideal form of competition. The reason it may not obtain optimal prices is because the prices may not be perfectly displayed, so that people in the market do not have complete information. If I have to wait until the driver shows up and talk to them in person to figure out their price, I very likely may end up getting a slightly worse deal. Perhaps a better compromise would be for you to select, in the app, what fare you would pay for a given route, and let drivers determine if they would accept that fare. If no one accepts, then you lower your fare until some driver takes the deal.

That also works.

Also, again consider the economies of scale argument. It's not clear to me that 100 small-time competitors can get the price lower than one Wal-Mart. Someone with more training in micro than me would have to get involved. But there are some easy to perceive reasons why this might be true. For example, credit card fees could very well be negotiated as a lower bulk rate for Uber than for the individual drivers.

In China it's perfectly straightforward to make payments from your debit card using an e-wallet app like Alipay or Zhifubao. Instant electronic money transfer from person to person and it doesn't cost anything. My understanding is that this is equally possible in the US or UK.

I don't see what economies of scale exist when it comes to taxi companies. Like I said earlier, I could pretty easily get black cabs for the same price that city cabs charged.

[WingCmdr Ginkapo]

The ordering/booking system, insurances, marketing, vehicle maintenance, training, etc are all overhead costs that can be substantially reduced by economies of scale.

Welcome to capitalism.

[riskllama]

for the record, i would just like to say that i would happily punch owen in the face for the duration of his cab ride. and don't forget to tip your driver...

[subtleknifewield]

I just use a bus if I need to go somewhere, anyway

[TA1LGUNN3R]

I just use a bus if I need to go somewhere, anyway

Ew.

-TG

[subtleknifewield]

Hey, not like I need to that often.

[mrswdk]

The ordering/booking system, insurances, marketing, vehicle maintenance, training, etc are all overhead costs that can be substantially reduced by economies of scale.

Welcome to capitalism.

A black cab has no ordering/booking, training, insurance or marketing costs.

[jonesthecurl]

The ordering/booking system, insurances, marketing, vehicle maintenance, training, etc are all overhead costs that can be substantially reduced by economies of scale.

Welcome to capitalism.

economies of scale are not restricted to capitalism, indeed are one of the most powerful arguments for centralisation.

[WingCmdr Ginkapo]

The ordering/booking system, insurances, marketing, vehicle maintenance, training, etc are all overhead costs that can be substantially reduced by economies of scale.

Welcome to capitalism.

A black cab has no ordering/booking, training, insurance or marketing costs.

And black cabs represent only a portion of the market.

DO YOU EVER READ YOUR OWN BLOODY THREAD?

[mrswdk]

The ordering/booking system, insurances, marketing, vehicle maintenance, training, etc are all overhead costs that can be substantially reduced by economies of scale.

Welcome to capitalism.

A black cab has no ordering/booking, training, insurance or marketing costs.

And black cabs represent only a portion of the market.

DO YOU EVER READ YOUR OWN BLOODY THREAD?

You mean the thread in which I have repeatedly advocated for the presence of independent black cabs and said I wish it was possible to catch independent, unregulated cabs?

When I say 'black cabs' I mean those guys operating as taxis illegally, not the over-priced tourist wagons you find in London.

[AndyDufresne]

DO YOU EVER READ YOUR OWN BLOODY THREAD?

You mean the thread in which I have repeatedly advocated for the presence of independent black cabs and said I wish it was possible to catch independent, unregulated cabs?

When I say 'black cabs' I mean those guys operating as taxis illegally, not the over-priced tourist wagons you find in London.

--Andy

[Bernie Sanders]

DO YOU EVER READ YOUR OWN BLOODY THREAD?

You mean the thread in which I have repeatedly advocated for the presence of independent black cabs and said I wish it was possible to catch independent, unregulated cabs?

When I say 'black cabs' I mean those guys operating as taxis illegally, not the over-priced tourist wagons you find in London.

--Andy

No regulations being followed. No criminal background checks. No Insurance. Low wages for drivers.

Why would I get into one of these black cabs, let alone let my family ride in one of these potential hazards?

[WingCmdr Ginkapo]

Starts thread about taxi company that has revolutionised the booking system. Pretends that taxi companies dont have booking systems.