Also it isn't really true that Uber lowers prices for riders when they lower prices for drivers. Uber practices active price discrimination to discover the highest price a rider will pay. If you get ten people together on the same street corner and everyone calls for an UberX, you'll get ten different prices.
That would be a huge story and would be much more interesting than the typical Uber hit job. If it were true, I have to imagine that it would have been covered by a journalist intent on attacking Uber.
Care to share some actual evidence?
More importantly, there's simply no way that you would have 10 different prices. Ten people on a corner might be enough to flip that area into surge pricing, but each individual would not get their own personal price.
It's not like this is something which is untestable. If people actually think Uber is discriminating on price between different users, that's trivial to test.
Outside of surge everyone pays a published rate.
Absolutely not. This is why price-discrimination always happens jumping through a weird hoop or other. Imagine the typical example of price discrimination, S/M/L coffee for widely spread prices that don't have much to do with the cost for the amount of coffee with prices that wildly change up and down depending how busy it is, customers would be rightly pissed for getting screwed because they're obviously not getting a fair price. Price differentiation needs some sort of trick to obscure this fact.
Otherwise it's like saying "getting away with this is perfectly fine because capitalism", which is motivated purely by greed, not the possible benefits of a free market.
> it's harder to arrange for 10 cars to arrive at a spot than 1.
I think you forgot to divide by ten, there. Try this statement for a fairer comparison:
to arrange for 10 cars to arrive at 1 spot vs 10 cars at 10 spots
Seems to me that the 10 cars at 1 spot should be cheaper.
The only reason they get away with this price differentiation going the other way is because they are able to hide these prices from the customers. Driving up profits from unequal information availability is also known as "screwing people over", so yeah that'd be a scandal (except for all the HNers that will go "I am genuinely curious why this is so *surprising" to anyone" -- because getting screwed should be a surprise, otherwise you should've gotten mad sooner, like when we said there's no proof of getting screwed)
I'm not even sure if it's positive or negative, given that they subsidize markets (running a loss) sometimes.
Wait really? Has this been written about? That would be very interesting!
1) Owning a car
2) Having insurance and good driving/criminal history records.
3) Willingness to do the work.
Even assuming Uber also has minimum age requirement, that's a very large supply of potential drivers, which is going to prevent wages from rising very high, unless there is artifical pressure such as regulation.
That's an interesting issue. We see the same thing in real estate -- seller's think their homes are worth way more than anyone will pay for them. I think this is one of the reasons For Sale By Owner (skipping realtor fees) hasn't taken off yet in the US. The FSBO seller will price too high, the home will sit on market for a while and people will think there's something wrong with it so they'll stop considering it entirely. As an anecdote, someone approached us the other day wanting to sell their family home for ~$4M that would realistically fetch about half that based on recent comparable sales in the area. At our current scale we can talk him down from that ledge, but we'd really like that listing process to be self-service and online. Traditional agents will say you need a selling agent there to talk the seller down to a reasonable price but my gut says we could solve this with computers.