[jmakeig]

Great read and thorough approach. However, it's worth noting that Uber provided the data for this study. I'd imagine they had an idea as to its conclusions before they provided it.

The findings are intuitive and validate that surge pricing is an overall good thing for the market.(Yea, microeconomics!) However, the cynic in me isn't sure we'd have seen a study that didn't come to that (positive) conclusion.

How does an agreement between an academic and a data provider work to prevent this sort of bias? (In the general case. I have no evidence of that in play here.)

Update: speling

[denzil_correa]

I am too concerned about the PR and the fact that this study was commissioned by Uber. I would view the conclusions of this study with appropriate skepticism.

http://newsroom.uber.com/2015/09/the-effects-of-ubers-surge-...

[hoopd]

> The findings are intuitive and validate that surge pricing is an overall good thing for the market.

Good compared to what? Good compared to having a giant monolith set prices for half the market, or good compared to a real market where drivers are allowed to set their own prices?

Surge pricing is Uber taking a small step away from their static central command pricing structure and moving an inch towards market dynamism. The real question is if they believe so strongly in markets why are they setting prices in the first place?

The current regulatory structure (in theory) sets prices on behalf of the public, 1000-to-1 odds says Uber sets prices on behalf of their shareholders.

[y0y]

If individual drivers set pricing, would I use the app? Not if there was a simpler alternative which, on average, led to the same overall pricing. Imagine the user experience if every driver was setting their own prices. Ugh.

[dnautics]

that is how sidecar works, although the actual mechanism of achieving that is quite clunky.

[BurningFrog]

The current regulatory structure (in reality) sets prices on behalf of the Taxi companies.

This is as predicted by Regulatory Capture theory, which is one of the most important concepts to know for anyone trying to understand society.

[hoopd]

This is a strange argument and I don't know how to take it. Uber's shown they're experts at lobbying and even steamrolling local governments to get what they want. If the current regulatory structure is corrupt the solution is to fix it, not let it be corrupted in a different direction that looks nice in the short-term.

http://www.bloomberg.com/news/features/2015-06-23/this-is-ho...

[BurningFrog]

Theory and experience says that it's somewhere between hard and impossible to fix it.

Regulatory agencies normally become controlled by the industries they are set to regulate. That's a fact that you need to be aware of when proposing regulatory solutions.

I'm not saying Uber is particularly good (or evil). Right now their lobbying disrupts some really bad systems. But I don't doubt they'll move on to getting their own regulatory commission once they're big enough. That's how our system works.

[hoopd]

I'm arguing that many small companies who have to organize and form a lobby will be far less efficient at regulatory capture than a well oiled monolith like Uber.

[Glastonbury]

I'm looking for an academic environment by which we could share thoughts and reference materials on regulatory capture. It is indeed an important concept to understand and one that needs more attention.

/r/regulatorycapture seems to be private yet might be such a place

[steven2012]

Your theory fails because regular Uber prices are almost half the price of a regular cab, which according to you is set on behalf of the public.

The benefit of Uber setting the price is that it makes the marketplace more reliable. And it's set at a level where both drivers and riders are happy. If Uber moves to a more dynamic pricing model, it makes it a lot more unpredictable and more complex. Maybe this will be the next step they take, but so far, I think everyone likes the predictability of the timeliness as well as the price.

[hoopd]

Your critique fails because taxi companies and Uber have wildly different cost and operational structures. Clearly Uber is turning a healthy profit.

I agree that stable prices are important for public transportation and that people like them, but stable prices require regulation or an extremely healthy market. In this case we're seeing a change of regulatory powers.

[1024core]

> Clearly Uber is turning a healthy profit.

Not really. They're losing money: http://www.bloomberg.com/news/articles/2015-06-30/uber-bonds...

[hoopd]

Investing heavily in multiple new markets doesn't exactly count as losing money and it doesn't mean their business model isn't wildly profitable.

[jmakeig]

Maybe "efficient" would have been a better word than "good". I have no doubt that Uber is pricing to benefit their shareholders, not the public good. That's why the taxi fare regulations are there in the first place.

[aianus]

> That's why the taxi fare regulations are there in the first place.

There should be a new saying, 'Never attribute to benevolence what you can attribute to corruption and greed'.