[iaw]

I think the author is painting this in the worst possible light.

The UX is a little misleading but I could see this being an effort by Uber to pre-commit drivers as a means of reducing surge pricing.

What makes this potentially unethical (in my mind) is where the price is set. If it's set at a point where Uber's models predict the average benefit to a driver is $0 then this is essentially shifting the risk to their employees.

[AnthonyMouse]

> I think the author is painting this in the worst possible light.

That happens with Uber consistently. The cab companies hate them with a white hot fire and there are plenty of media outlets who are happy to take a story from a PR flack, especially when it generates page views.

When people complain about surge pricing and then complain about things that mitigate surge pricing, that is pretty good evidence that they just want to complain about something.

> What makes this potentially unethical (in my mind) is where the price is set. If it's set at a point where Uber's models predict the average benefit to a driver is $0 then this is essentially shifting the risk to their employees.

But in that case why would anyone take the deal?

If they did that then the drivers would pay $115 to make back $116 (or $110) and then never do it again because it's not worth the risk.

[jlarocco]

> That happens with Uber consistently. The cab companies hate them with a white hot fire and there are plenty of media outlets who are happy to take a story from a PR flack, especially when it generates page views.

> When people complain about surge pricing and then complain about things that mitigate surge pricing, that is pretty good evidence that they just want to complain about something.

That's an ad-hominem. If you're going to claim people are complaining just to complain then you need to support your case that this sleazy pay-to-play scheme isn't a sleazy pay-to-play scheme.

Just because Uber is trying to fix something bad (surge pricing) doesn't mean their solution (this ridiculous scheme) isn't also bad.

> > What makes this potentially unethical (in my mind) is where the price is set. If it's set at a point where Uber's models predict the average benefit to a driver is $0 then this is essentially shifting the risk to their employees.

> But in that case why would anyone take the deal?

The first problem is that drivers have no way to know that until they've lost money on the deal. Uber has a team of accountants to figure out their expected returns while the average driver does not.

Also, as others have pointed out, there's a conflict of interest for Uber because they control who gets called up, so they can avoid sending rides to drivers who are about to cross the threshold for a payout from this scheme.

> If they did that then the drivers would pay $115 to make back $116 (or $110) and then never do it again because it's not worth the risk.

It's not that simple, though. Since Uber controls who gets rides, they can make sure that some portion of drivers come out ahead using this scheme. When other drivers claim they lost money or just broke even, the "winning" drivers can chime in that the scheme worked great for them. The end result is confusion and uncertainty, so that nobody outside of Uber itself really knows one way or the other how it will turn out.

With as many drivers as Uber has, they can probably fake it for quite a while.

[AnthonyMouse]

> That's an ad-hominem.

Its an explanation of their motives.

> If you're going to claim people are complaining just to complain then you need to support your case that this sleazy pay-to-play scheme isn't a sleazy pay-to-play scheme.

It has an obvious benefit in increasing available supply. Once a driver has paid the fee they have 35% more incentive to provide service.

> Just because Uber is trying to fix something bad (surge pricing) doesn't mean their solution (this ridiculous scheme) isn't also bad.

Neither of them is actually bad.

Bad is the inability to get a ride during high demand because nobody is doing either of those things.

> The first problem is that drivers have no way to know that until they've lost money on the deal.

That only works the first time. After that the driver has their own experience to draw on.

> Since Uber controls who gets rides, they can make sure that some portion of drivers come out ahead using this scheme.

In which case only those drivers will sign up next time and the pool of drivers willing to sign up shrinks every time.

> When other drivers claim they lost money or just broke even, the "winning" drivers can chime in that the scheme worked great for them.

Nobody cares what other people say when their own personal experience says something else.

It's easy to trick anyone once, but then they won't trust you anymore. People not trusting you forevermore is an expensive price to pay for a one time payout.

[jacalata]

Did you know that many people buy lottery tickets week after week based on their understanding that other people are winning, and not their own experience of losing constantly?

[AnthonyMouse]

> Did you know that many people buy lottery tickets week after week based on their understanding that other people are winning, and not their own experience of losing constantly?

Because lottery tickets are entertainment. People with crappy jobs get to imagine telling off their stupid boss and moving to their own private island. The fact that it never happens doesn't mean people won't pay $1 to imagine it. Or for the feeling they get when the numbers are being read and the first two or three actually match once in a while.

There is nothing equivalently exciting about temporarily getting paid 35% more at work.

[Karunamon]

Probably because a one in tens of millions chance is infinitely larger than a zero in tens of millions chance.

And people say lottery players are bad at math!

[lightedman]

"I think the author is painting this in the worst possible light."

You should work for any sort of delivery or courier service. This 'worst possible light' is daily business for companies like Papa Johns and others that claim their drivers are merely 'contractors.'

This is also quite illegal - you can not pay to work. It's literal extortion - you have to pay us in order to receive this amount of wage. No, the courts frown upon this.

[kingnothing]

IANAL, but it's similar to how cabs, barbers, strippers, and other contractors operate.

[dawnerd]

They're renting space though. An uber/lyft driver isn't renting a medallion or a barber seat.

[sokoloff]

Salespeople pay for leads. Businesses pay for online clicks. Advertisers pay for eyeballs.

I don't see this as a bright-line case.

[hydrogen18]

Would you agree that none of those people pay their employer in that case? I certainly agree salespeople pay for leads, but it is usually an outside party supplying them.

[sokoloff]

To keep it close to Uber, many cab drivers rent their cabs/medallions from the cab company.

In the taxi (and Uber) case, I believe most of those are contractor relationships, not employee relationships.

[PatientTrades]

> This is also quite illegal - you can not pay to work

You do know the offer is optional right? If a driver doesn't want to pay $115 for the 33% rate increase then they don't have to. Did you read that part? Also, many drivers could benefit from this especially if they drive full time in popular areas.

[drewrv]

There are all sorts of optional deals that are illegal.

[lightedman]

"You do know the offer is optional right?"

You do know that such an offer is illegal, right? It is literally "If you pay us, we'll pay you more later on." It's the actual beginning of a Ponzi Scheme.

[AnthonyMouse]

> You do know that such an offer is illegal, right?

Which law does it violate?

> It's the actual beginning of a Ponzi Scheme.

Your argument is of the form "Romans build roads, therefore people who build roads are Romans."

Ponzi schemes don't have actual customers, which inherently leaves the people at the bottom of the pyramid holding the bag.

Uber pays drivers from fares. There is no pyramid.

[michaelmrose]

Ponzi schemes are defined by the fact that you can earn some revenue but not enough to sustain the employees at the base of the pyramid while having some means to bring in new players who will help you earn enough to keep going usually by contributing some part of their income to you.

Its a scam because their is a finite pool of potential idiots and when you run out the bottom of your pyramid collapses taking subsequent layers with it eventually.

If a multi level marketing company actually provides enough wealth for the bottom level to function then it isn't a ponzi scheme.

[lightedman]

Uber's been running at a consistent loss.

Ponzi Schemes don't have customers? There have been plenty of "multi-level marketing' businesses selling things like perfumes, knives, even candle wax, and have been ruled as Ponzi/Pyramid Schemes. It's the exact same behavior - pay us to make money.

[AnthonyMouse]

> Uber's been running at a consistent loss.

So do a million other startups. That doesn't mean the drivers don't get their money.

> Ponzi Schemes don't have customers?

The majority of the scam's revenue comes from payments from workers rather than sales to customers.

> It's the exact same behavior - pay us to make money.

Pyramid schemes have pyramids.

[viraptor]

The higher rate is there to incentivise more people. The stable state is at the point where enough drivers opt-in that they all get to just the break-even point.

[fgonzag]

Or if they start heavily throttling your rides as you approach break even.