Boraxo

As detailed here, the drivers collectively go offline

https://www.zerohedge.com/news/2019-...ronized-scheme

Uber and Lyft drivers at Reagan National Airport have been gaming the system "every night, several times a night," by simultaneously turning off their rideshare apps for a minute or two so that the system is tricked into thinking there are no drivers available, thus creating a price surge.

*** "When we find out what the highest surge is, that’s when we say everybody on. And that’s when everybody gets paid what we think we should be getting paid," said the man.
"It’s like we work as a family, like a team together. Like as a team. We do it. Every night. We do it again. We drop off, come back again, it’s a routine. We do it to 12 o' clock."

davie355

Unseemly behavior but not quite a scam. The system isn't tricked. If the drivers aren't willing to work for non-surge fares, then those drivers are indeed unavailable.

Jaimito Cartero

nygiants242

WillBarrett_68

I'm all for it. If uber isn't paying them enough they'll stop driving and find something else to do, which would be terrible for me in the long term.

Often1

Makes no sense unless someone actually has Uber's data handy (and they don't). DCAis chock full of Uber/Lyfts. It would take a coordinated effort by a lot of them to significantly move pricing. There are often as many as 6-7 pickups going on at each of the zones. A couple of drivers won't matter.

Lastly, drivers go into a pool for pickup priority. Shutting off the app puts you at the end of the line when you turn it back on. If the fares are boosted, it is someone who is now ahead of you who gets the benefit.

Sounds to be as though the standard variability, e.g., prices can rise and fall by several dollars across a minute, creates suspicion.

davie355

Drivers must be physically in the airport staging area to enter this pool. The article describes drivers in that area coordinating an effort to shut down.

steve64

FWIW .... that method of paying drivers for surge ended about 2 years ago.
Drivers no longer earn a set percentage of the fare collected by Uber. They earn set per-mile and per-minute rates.
If demand is high, Uber still charges the passenger a higher "surge" rate. If driver supply is also low, then they will add a set amount to the driver's pay.
It is possible (for example) that Uber maybe charging a 20% surge, but adding zero incentive to drivers. As surge gets higher, part of the reason is a lack of drivers in the area so the driver incentives start showing up. They are typically $2 - $5.

Uber spun this to drivers as an advantage. It used to be that if there was a surge going on that drivers would really benefit on long rides, to the point of playing games to get out of short rides.
With the new system, if the incentive is $3, then the driver gets $3 extra regardless if the ride is around the block versus 20 miles.
While that explanation sounds good, the bottom line is that Uber is generally keeping more of the fare on "surge" rides now that "driver payout" is no longer tied to "fare charged". Uber keeping 50+% of the fare is not unusual.

WillBarrett_68

Could you give an example where "demand is high" and yet the driver supply is not low? Aren't those just two ways of saying the same thing?

steve64

For each trip, drivers can see the breakdown of the total amount charged to the passenger.
In "light" surges, I've seen cases where the passenger may have been charged $2 extra, yet there is no extra incentive passed to the driver. Under the old system, the driver would've earned 75% of that $2.

The passenger fare and the driver payout isn't always "supply vs demand". Uber bills itself as a "technology" company, not a transportation service.
They track consumer behavior. They will charge you whatever extra "surge" fare they think they can get away with. Whether or not there's a a driver nearby is irrelevant. The thing that keeps them (and fares) in check is Lyft (who has also separated "driver payout" from "fare collected").
Likewise, they will attempt to satisfy all ride requests with as little driver extra incentive as possible.

That's not to say that supply vs demand doesn't come into play, it simply isn't the only factor. I suspect that as the rate's "surge multiplier" goes higher, there indeed needs to be more and more incentive to get the drivers in location.
But back to the post I was originally replying to .... drivers may very well be "forcing surge", but these days it would be a few dollars and not the 50+% boost that was implied (even though Uber may be charging 50% more).

To be fair ...
Under the new system, there are rides where the driver payout exceeds the fare collected.
From the passenger perspective, what I call "separation of driver payout from fare collected", is known as "upfront pricing". The quote provided before requesting a ride is supposed to be an actual quote (it was originally an estimate, and the final fare charged would be time distance based, just as the driver payout). I know there are many passenger complaints that Uber doesn't stick to the original quote, but that's another topic. If (for example) there was an unexpected traffic jam, the the "time" portion of the driver payout goes up while (in theory) the fare collected remains the same.

RLG

This is mostly likely a felony violation of the Sherman Anti-Trust Act. They are clearly colluding with other suppliers of a product to offer or withhold the product in order to fix prices. (Note that a labor union would be exempt if the drivers had one.)

Fortunately for the drivers, I doubt that any US Attorney thinks he'd advance his career by prosecuting them. The guys quoted in the article better hope they don't come to the Justice Department's attention for any other reason.

wahooflyer

I have some sympathy for the drivers here: if Uber/Lyft prices were not so cheap, they wouldn't have to resort to surge manipulation. A company can only price its service below cost for so long before the losses (in this case, to both drivers and the billions of $ in VC funding) get too great. When UberX first launched in DC in 2013, I believe the fares were around $2.10 per mile, with the driver keeping 80% of the fare - similar to, or perhaps a bit higher than, taxi fares. Now, drivers get only 60-80 cents per mile, plus 10 cents per minute, depending on the city. Hard for anyone to make a living on that after accounting for vehicle expenses.

tmiw

FWIW, I've seen Uber marketing to drivers where I live claiming "up to $20/hour". Whether that's livable for anyone in any metro area, on the other hand, is another question.

strife

It is difficult to have sympathy for the drivers when one of the reasons Uber/Lyft prices can be so low is that there are so many Uber/Lyft drivers willing to drive at those respective revenue levels.

wahooflyer

Problem is, many if not most Uber drivers don't understand the economics of running their car into the ground to earn pennies - at least in the beginning. The driver pay is so cheap that many if not most UberX/Uber Pool drivers in the US would show a "business loss" on their Schedule C if they deduct ALL Uber mileage (including unpaid "deadheading" to/from each pickup location) at the IRS rate of 58¢ per mile. Although fares paid by passengers have increased (UberX seems to cost about the same as a cab here in DC now, at least for short trips), drivers now only get 60-80¢ per mileplus a few pennies per minute in most cities, down from $1.50+ per mile to the driver when UberX first launched in 2013. Sure, some vehicles don't actually cost 58 cents per mile to operate, but I've ridden in plenty of $30-50K MSRP cars on UberX rides that are taking a huge depreciation hit for their owners.

The math just doesn't compute when you think long-term; there's not an endless supply of cheap labor in the US, at least when the unemployment rate is as low as it is now. Uber seems to be counting on a revolving door of willing drivers, and I have a feeling that well will run dry at some point once more and more drivers realize how little they're actually netting.