Is Uber’s Surge-Pricing an Example of High-Tech Gouging?

Anyone ride cabs?

http://www.nytimes.com/2014/01/12/magaz ... .html?_r=0

"At 10 p.m. on New Year’s Eve, I hailed a taxi outside my apartment in Adams Morgan and directed it to a friend’s apartment in Shaw, a nearby neighborhood, also in Northwest Washington. It took a mere minute to find an open car, and the traffic-clogged two-mile trip cost $13, including tip.

Three hours later, early in the morning on New Year’s Day, I figured that hailing a cab would be difficult if not impossible, and I requested a black car from the app-based service Uber. It took three minutes for a sleek sedan to arrive, and Uber let me know that I would be charged two and a half times its normal fare — part of its “surge pricing” strategy, implemented to help keep supply in line with demand, the company says. That ride home cost $47, no tip necessary.

The same service. The same amount of time. The same trip, if in reverse. And a price differential of three and a half times. That kind of arithmetic has, of late, enraged many of Uber’s users, who accuse the company of ripping off consumers when they need a ride the most: during holidays, deluges and snowstorms. The reaction from Uber has been equally strong. In short: Don’t want to pay the fare? Fantastic. Don’t use the service."...

Remember the old days of long distance, cheaper to call on night and weekends? Just trying to encourage people plan their trips.

FredHayek wrote: Remember the old days of long distance, cheaper to call on night and weekends? Just trying to encourage people plan their trips.

Remember the days of calling your self collect to signal you had arrived without incurring a long distance charge?

"So, What Really Happened with the Government vs. Uber?
by: Jacob Huebert
inShare
12
It happens everywhere, and it’s all too common in Chicago and across Illinois: established players in an industry will lobby government to enact laws and regulations to keep new competitors out, protecting their profits while killing entrepreneurship.

Some technology startups may not face this problem. A company creating something altogether new in an industry still in its infancy may not have established players or protectionist laws in its way. On the other hand, a startup offering an innovative product that disrupts a well-established, politically privileged industry may find itself besieged by lawsuits and bureaucrats."...

http://technori.com/2013/02/3289-startu ... t-vs-uber/

The free market at work in France.

http://blogs.ft.com/tech-blog/2014/01/u ... ised=false

"Taxi drivers turn violent against Uber in Paris
January 13, 2014 7:15 pm
by Tim Bradshaw

The taxi industry’s war on app-enabled chauffeur services such as Uber has broken out into physical combat on the streets of Paris. During a strike by French cab drivers who are protesting against the rise of what are locally called “voitures de tourisme avec chauffeurs”, several drivers and limos who crossed the picket line were attacked, with windows smashed and tires slashed.

The incident was first reported on Twitter by Kat Borlongan, co-founder of French open-data company Five by Five:

Got attacked in an @uber by cab drivers on strike near Paris airport: smashed windows, flat tires, vandalized vehicle and bleeding hands.
— Kat Borlongan (@KatBorlongan) January 13, 2014

“Unfortunately, we can confirm this morning’s incidents in Paris. We strongly condemn this severe violence with which Uber riders and partners were confronted,” Uber said in a statement. “That taxis chose to use violence today is unacceptable, that they chose to strike is their business.”...

http://www.usatoday.com/story/opinion/2 ... /10198131/


"The regulatory knives are out for Uber and Lyft, two ride-sharing services that make life easier for consumers and provide employment opportunities in a stagnant economy. Why are regulators unhappy? Basically, because these new services offer insufficient opportunity for graft.

Services like Uber and Lyft disrupt the current regulatory environment. I have the Uber app on my phone. If I need a car in areas where Uber operates, it looks up where I am using GPS, matches me with participating drivers nearby, and in my experience gets me a Town Car in just a few minutes. It's the comfort of a limo service, with the convenience of a taxicab. I get a better service, the driver gets a job, but now there's competition for those entrenched companies.

In most cities, traditional taxi services are regulated by some sort of taxi commission. Similarly, limo services — the ones that provide the black Town Cars favored by big shots (and used by many Uber drivers) — are regulated by some sort of livery office. The rules strictly forbid the two sectors of the market from competing with one another. And, generally, entry is limited so that neither faces too much competition in general. In holding down competition, these regulators act on behalf of the entities they supposedly regulate for the benefit of consumers.

They do this because consumers typically pay very little attention to taxi and limo regulations while the regulated industries, unsurprisingly, pay very close attention. They express their gratitude in a variety of ways, some legal, and the regulators in turn look after the interests of the regulated. Consumer well-being is a far less significant concern.

In the world of Administrative Law, this phenomenon is known as " regulatory capture." Set up a government agency to regulate an industry, and in short order it will wind up regulating on behalf of that industry. (One example is the District of Columbia Taxicab Commission, which has been doing its best to block ride-sharing services.) Look at almost any established regulatory regime, and the regulatory environment will tend to favor entrenched companies over new entrants. This is no accident.

And when new competition shows up? That's when the regulators ride to the rescue. Austin, Texas, is impounding cars of drivers for ride-sharing services. The DMV of Gov. Terry McAuliffe's Virginia is also trying to ban Uber and Lyft.

Regulators — and the industries they protect — will try to tell you that all this regulation is in service of consumer protection. Why, if you use an unlicensed, unregulated car service, you might be robbed, raped or overcharged! As if those kinds of things never happen in ordinary cabs or limos. (Actually, I think services like Uber and Lyft are actually safer, since they keep a clear record of when, where, and by whom riders are picked up, and track the cars involved.)

The truth is that although occupational regulation is usually presented as a protection for consumers, it's usually demanded by the regulated industries themselves, and not by consumers at all. That's not surprising, because it's usually the regulated industries and the well-off people controlling them who benefit. In Chicago, a taxi medallion (license) costs $360,000 while the actual drivers — employed by the medallion owner — can earn less than minimum wage. And consumers pay higher taxi rates because of reduced competition."...