Uber Had A Very Bad Day On a backdrop of tragedy, prices were unilaterally increased. Yes “surge” pricing is based on supply and demand, but implemented poorly.
- From the image, the scope of the change is unknowable. This increases uncertainty.
- Its unilateral. Nobody likes it when options are removed.
- Uber does not present this as a profit opportunity for risk tolerant drivers.
- In fine print, the rate expires in 2 minutes. What does that mean? The rate will go higher, or lower?
This is fallout from not showing supply AND demand AND letting people choose.
If Uber had a map showing the supply and demand near the tragedy, everyone would understand that the tragedy is causing higher prices, not Uber. If someone thinks a price is too high, that is not a problem, its an opportunity! They can’t complain anymore: If they don’t like the price, great, offer a lower one. There will be people who are fine with the risk of getting closer to the tragedy. Plus, people could say they are willing to pick up a short walk away.
The goal of the free market is to complete a win-win transaction. That’s hard without full transparency.
This PR issue also illustrates the symptoms of:
- Fiat decisions verses evolutionary decisions. Uber first charges double, then reverses the fees. All this takes overhead and decisions making.
- Uber is billed as peer 2 peer, but obviously is not.
- There is very little focus on supply, mainly on demand.
- Participants don’t set prices.
- Their driver verification process has critics. (But a few instances of violence is pretty small compared to the number of rides. It might be statistically safer to ride Uber than to walk.)
- The presence of God view. This overhead is not needed with true peer to peer.
If Uber used a free market pricing model, they would make less money, but provide a better priced service.
0 – 1.6 mins talking about the above info.
1.6 – 4.6 mins a visual suggestion.