Uber surge pricing - lack of transparency - individual targeting

mshanann on 04/10/2016 - 11:35

I'm starting to have real trust issues with this company in terms of its surge pricing.

Case in point, three of us on a quiet weeknight in Brisbane CBD around 10 PM standing next to each other, all take out the Uber app to get respective rides home. I'm first to request the uberX, but mine pops up with surge pricing at 1.4x. The other two whom seconds later request the same uberX and use the app far less frequently get no surge pricing. I reject offer, close app and retry 30 seconds later and mysteriously now no surge pricing.
In the past I have accepted surge pricing, so I'm sure they have 'learned' that I'm more likely to accept such fair hikes.

I'd be very surprised if these guys are not using various analytical information such as home postcode, past purchases etc to construct this surge pricing ratio.

Whether correct or not, a driver has told me you may have 3 available cars in a neighbouring suburb, but none in the immediate, you are likely in this scenario to be charged surge pricing. He mentioned also if possible to always wait until cars appear in the vicinity before requesting.
The question then is whether the little GPS map is actually accurate.

It would be interesting to run some experiments and see what they are up to.

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Comments

  • smashed on 04/10/2016 - 12:19
    +2

    It is plausible that the surge ended just after your quote. It has to end at some point.

    Your case would only be valid if you had seen a surge quote between your 2 friends who did not receive a surge quotation.

    Alternatively, they are likely to have more than a simple (are we busy) when calculating surges.

    • mshanann on 04/10/2016 - 13:43

      Plausible - I'm leaning more towards possible, but improbable.

      This company is making use of every bit of sensor data available … e.g. phone gyro - supposedly for good …
      https://newsroom.uber.com/curb-your-enthusiasm/

      Do you believe a company like Uber only uses this data it collects to help the consumer (as this Schneider person tries to allude to below)?

      http://finance.yahoo.com/news/uber-quietly-started-end-surge…

      "Schneider: Surge pricing gives us that reliability we count on but, as you say, nobody loves surge pricing. Right? And so that’s where machine learning comes in … because now we can look at all this data and we can start to make predictions. When is that demand going to show up? Is it going to be busy on Halloween? Yeah, we can pretty much count on that one … But to find those Tuesday nights when it’s not even raining and for some reason there’s demand, and to know that’s coming—that’s machine learning. And so the idea is if you can predict that demand, you get that information out there, and you get that supply there ready for that demand, so the surge pricing never even has to happen. And I think that’s one of the really cool things that machine learning’s doing for Uber right now."

      You could use quite a number of factors - individual history, time, source location, destination, gyro sensor (drunk) etc to come up with an interesting surge pricing multiplier. If it was my company, I'd sure as hell be experimenting with it to maximize revenue.

      • pernunz on 04/10/2016 - 14:03

        It may be the same as any other tech company, where it runs experiments on some of its users to see how they react, and use that information in their algorithms.

        This is a good podcast by an economist who has worked in big IT companies about the experiments they run: http://www.econtalk.org/archives/2016/09/susan_athey_on.html

  • Diji1 on 04/10/2016 - 14:09

    I'm starting to have real trust issues

    So naive lel …

    It sounds like it's working like they say it works: you request a ride, 1.4x price gets a driver out, more supply of drivers, price drops, friend requests gets lower price.

    • mshanann on 04/10/2016 - 15:05

      I'm talking a 15-30 second window, 3 people, identical location, one gets surge pricing (the first). If Uber were transparent about surge pricing, there would be a way to query it independently without using the app.

  • fruit on 04/10/2016 - 14:10
    +5

    HAHAHAHAHA you really thought Uber who never gave a (profanity) about laws is going to treat you reasonably?
    Cue all the corporate suck ups responding.

    Next you'll be posting that Google is abusing your data.

    • Diji1 on 04/10/2016 - 14:18
      +1

      How dare you say something bad about Google! You make it sound as if all they do well is spy on people and serve unwanted advertising you monster!

    • mshanann on 04/10/2016 - 14:55
      +1

      It will be interesting to see how things play out. There soon must be a reduction in number of taxis in major cities due to lack of work - with more people switching over to Uber and other viable competing services. Once you have the market share, you can do some very interesting things with pricing particularly with all the data you have on hand about your consumers.

      Uber privacy statement
      https://www.uber.com/legal/privacy/users/en/

  • Davo1111 on 04/10/2016 - 14:28

    Could be right, could be wrong, could be crazy.

    Given sample size = 1, from 1 event, can't conclude anything.

    • snook on 04/10/2016 - 15:34

      I think you're looking for a lunatic

  • bobbified on 04/10/2016 - 14:33

    Even if you know what Uber is doing with all that data - when you're standing there with your phone in your hand and surge pricing appears, you still only get to pick one of two options:

    1. "Accept" the surge pricing
    2. "Decline" the surge pricing then try again later or jump straight into a taxi.
    • 00 on 16/12/2016 - 19:46

      That is until the only options become:

      1. "Accept" the surge pricing
      2. "Decline" the surge pricing and walk home because Uber has become the monopoly and all former taxis are now uber drivers.
  • Baysew on 04/10/2016 - 14:46
    +5

    If only there was an alternative. Something that is heavily government regulated without this surge pricing. Something that doesn't spy on you. Something you could summon up from the street and be anonymous to use.

    • fruit on 04/10/2016 - 14:59
      +3

      Perhaps we could have a light on top of the car to indicate they are not taken.

      • mshanann on 04/10/2016 - 15:09

        … and cars that smell like their drivers - or vice-versa, with plastic seat covers, and crazy flag fall prices, 10% charge for using debit/credit cards, and yellow pages on hand to look up phone number.

        .. anyway post is not about the merit of taxis. It is about whether you should implicitly trust uber surge pricing.

        • fruit on 04/10/2016 - 15:18
          +1

          10% charge for using debit/credit cards

          That's due to more dodginess aka CabCharge.

          There are GPS apps for taxies and I haven't had a crappy taxi drive.

          But don't listen to me now… come visit this post in 5 years when you realise when VCs pour money into something ie. Uber they expect big returns.

        • NBAD25 on 06/10/2016 - 13:15

          Also a lot of banks refuse eftpos devices to be used in taxis for some reason (I had called around one time around 18 months ago), maybe it's changed now, but often cabbies go through cabcharge or other dodgy firms who take the 10% cut.

  • Stewardo on 04/10/2016 - 17:47
    +1

    I was going to order one on sat afternoon, the app said surge pricing x2.9, and said " do you want us to tell you when surge is over?" I clicked yes and used 13cabs app to book taxi, 10 seconds after I get message from Uber saying surge over. On my way home around 9pm the exact same thing happened, I think they just try to rip you off if they can.

  • poppit88 on 05/10/2016 - 02:28

    They don't even have a phone number, address or email to lodge a legitimate complaint.

    I booked with them a month or so ago. After waiting for 10 mins, texting the driver twice and then calling him twice and giving him an actual street address he still didn't turn up. I cancelled the booking and re-booked (the next driver turned up in around 2 mins) I ended up with a $10 cancellation fee from UBER. I've been told by another UBER driver that it's the driver that decides if he'll invoke this mystery charge.

    It doesn't matter that when canceling the original booking nothing was mentioned about additional charges being levied if I cancelled.

    I eventually ended up with a $10 credit on my UBER account. Finally used it on fare last week.

    I've now cancelled my UBER account - I won't be using them again anytime soon!

  • Findo on 05/10/2016 - 03:57

    Uber is dodgy full stop. No matter how they paint their business as being legit, they aren't very ethical and screw their drivers over. I'd rather hop into a cab any day, or better yet, a hire car. Unfortunately I don't have any cabcharge vouchers or a corporate credit card, so I have no reason to catch cabs on a regular basis :(

  • ronnknee on 10/10/2016 - 00:00

    I'm first to request the uberX, but mine pops up with surge pricing at 1.4x. The other two whom seconds later request the same uberX and use the app far less frequently get no surge pricing. I reject offer, close app and retry 30 seconds later and mysteriously now no surge pricing.

    It seems like you just requested the ride at the exact same time when the surge pricing was about to end. Nothing to do with targetting.

    /thread

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