[gdhbcc]

I dont see how Lyft gets off calling this fraudulent. Seems to me it's the system working as intended, and as it should.

Drivers dont want to drive for under a certain value, so they simply inform the app who adjusts the value to fulfill demand. Seems like its what you want to happen.

[i_am_proteus]

And it only works as long as all of the drivers in an area agree: one or two drivers who don't join the scheme, and it doesn't work.

[metalliqaz]

Not all. The large majority, but not all. There are very likely one or two drivers in the area that don't participate, simply because they aren't in the parking lot at the moment they orchestrate the mass logout. Surge pricing is about supply and demand, so if expected demand is high (like at an airport) they need a lot more than one or two drivers.

[mikeash]

I don’t think it even necessarily needs to be a large majority. It just needs to be enough such that the remaining drivers aren’t sufficient to meet demand. Depending on circumstances, that could require anywhere from one driver to all of them.

It’s a great illustration of how supply and demand work to determine prices.

[metalliqaz]

Yeah, agreed, but these guys are going for maximum rate, so they have to get as many as possible.

[mikeash]

Indeed. And as the rate grows higher, there’s ever more incentive to defect from the scheme. This should be a case study taught in Economics 101, it’s so pure and clear!

[kevin_b_er]

Well, yes. It will settle at the rate they're actually willing to be paid, not the one their "employer" is setting for them.

[duxup]

Maybe not all, but I wouldn't be surpised to see someone "not participating" txting a buddy "prices up".

Someone has to check it to make sure it is working.

[netsharc]

Couldn't they check using the passenger app?

[duxup]

I the rate that the passenger sees always the rate that the driver is paid?

If so then yeah, but I'm not sure they're always 1:1.

[eropple]

It used to be almost exactly proportional. Lyft and Uber have been progressively trying to disconnect the two values, though; these days it's probably not possible to tell.

[ardy42]

> And it only works as long as all of the drivers in an area agree: one or two drivers who don't join the scheme, and it doesn't work.

That's much easier to organize at an airport than elsewhere, since all the drivers are required to gather together in an airport waiting area.

[asdff]

If one or two drivers pick up the fair before the surge they are good for 15+ minutes of being not at the airport driving someone someplace, then the surge can just happen then after they leave.

[mikeash]

And it’s not like Uber and Lyft are a monopoly. Taxis are available, and there are roughly eighteen million private car services in the area.

[dnautics]

Its not clear to me that Lyft is calling the behavior fraudulent. That's a sketchy AF quote-out-of-context by wjla.

[ma2rten]

I don't know if I would call it fraud, but I can see where they are coming form. Drivers aren't individually deciding to turn off the app, but they are doing it collectively to manipulate the app into surge pricing.

[ardy42]

> I dont see how Lyft gets off calling this fraudulent.

The workers are "defrauding" Capital out of greater-than-substance wages. It's bullshit, and they'll try to re-frame in in terms of customers, but that's essentially their view.

[richardknop]

Well, Lyft drivers are supposed to be contractors, it's normal for contractors to set their rate so I don't see how this is fraudulent.

[eropple]

'ardy42 is presenting the part of the argument that Lyft and Uber can't say aloud but almost certainly believe.

Lyft and Uber have a vested interest in making their objection seem "pro-consumer," when they're primarily anti-worker; lower prices to the consumer pumps up the demand curve and Lyft makes more money.

[rayiner]

> Lyft and Uber have a vested interest in making their objection seem "pro-consumer," when they're primarily anti-worker;

Given that Lyft and Uber are losing money, there is no difference between the two. Uber and Lyft are just vehicles (hah) for consumers to make taxi drivers work for less than what taxi drivers used to make. People use Lyft and Uber because it’s cheaper than taxis. Since Uber and Lyft don’t make any money, those savings are coming out of the pockets of drivers.

[eropple]

I mean, fair cop. Though a lot of my Uber and Lyft use is with the endless discounted ride offers I get, which seems to just be a transfer from investors to...well...me.

[rayiner]

Contractors can set rates. They cannot make agreements with other contractors to not accept jobs for below a certain rate.

[klyrs]

Musicians, actors, screenwriters, etc., belong to guilds which do exactly that. And, oh hey, it looks like there's already an independent drivers guild: https://drivingguild.org/

[matz1]

From the perspective of Lyft it is fraudulent.

[Jeff_Brown]

Not exactly. The percentage that Lyft takes is the same, so Lyft actually makes more money from these price-hikes. The ones suffering are the passengers.

[eropple]

This assumes an inelastic demand curve. DCA has other options, such as taxis.

(edited s/elastic/inelastic - I dun goofed. Thanks, Erik!)

[Jeff_Brown]

The existence of other options implies a more elastic supply curve, but implies nothing about demand.

That passengers suffer from a price surge does not assume an inelastic demand, or even a downward-sloping one. If you pay a higher price, you're suffering more, even if somehow it leads you to buy more of that thing.

[eropple]

Eh--"suffering" seems a bit dramatic; as economic transactions go, the up-front price quote by Lyft and Uber makes it pretty transparent and the options available to depart DCA put an upper bound on costs. But I was more referring to how Lyft and Uber make more money off of shorter, cheaper rides. They do make more from longer rides, because of percentages, but my understanding is that volume makes them much more money and that higher prices do depress volume.

[Jeff_Brown]

These are good points.

By "suffering" I just meant "paying (someone, maybe another ride service) for it".

If higher prices depress volume, then some of the very drivers temporarily striking to raise the price end up paying for it, by ending up without a client. If all the drivers gain from it, then the airport demand for their Lyft services in particular (as opposed to demand for other ride companies) would in fact appear to be pretty inelastic. (Both seem plausible to me.)

[ErikVandeWater]

*inelastic

Great point - they could be loosing a lot of passengers to taxis

[conanbatt]

The math has some nuance: an extra dollar for the driver increases his margins a lot more than it does for lyft/uber.

10 rides at 10 bucks or 5 rides at 20 is the same for uber, but way better for the driver (and worse for the consumer).

[bobwaycott]

I believe you mean subsistence, not substance.

[NotPaidToPost]

This seems the very definition of fraud, though.

Edit:

Fraudulent: "intended to deceive someone in order to get money or property".

The collusion is intended to deceive Lyft (and in the end customers) for financial gains.

[eropple]

By leveraging the supply controls, which are explicitly theirs to use to communicate willingness to take on work, in a two-sided market where you're not allowed to directly set prices? Please substantiate how that is fraudulent.

If Lyft and Uber allowed direct pricing, this wouldn't happen. Drivers would set the price they're willing to work for. Instead, drivers--who, once more for emphasis, are supposed to use price fluctuations as incentive or disincentive for working, that's what "surge pricing" was in the first place--only have one message that they can send: "nope, not at that price".

Or they can be obligated to work cheap because rich people demand their labor.

Hrm. I think I now understand where the claim of "fraud" comes from.

[chrismeller]

So go drive a cab instead. I hear that’s a great life.

They agreed to drive for a service for x. They can’t then complain that they are making x or manipulate the system to earn more than x.

[eropple]

No, they did not agree to "drive for a service for X". They entertain offers to drive at a given rate. They can choose to take those offers or not. That's the whole point of the on-demand, contractor-but-not-really relationship (see also the way that Lyft and Uber punish drivers to don't take absolutely every ride that pops up on the app) that underpins Lyft and Uber's business model.

They're refusing to entertain offers below a certain rate. That drops supply, which requires price increases to satisfy demand on the other side. The market, literally, is working as intended.

[chrismeller]

Ok, so they agreed to entertain offers. They can always say no. They have accepted those rides, so there is no possible argument to be made.

Grouping together to drop off and artificially increase prices when a flight lands sounds great because these are “the little guys”. If Google were doing it you would lose your shit.

[eropple]

Uber and Lyft retaliate--in ways that are at minimum unjust and in a functioning legal environment I'd bet a lot of money would be found illegal--for rejected rides.

Google doing it would be different, certainly. Companies are less important than people and poor people trying to survive get significantly more leash than multi-billion-dollar companies. If ride-on-demand companies operated with a transparent bid-ask system (see something like Taskrabbit for an example) instead of the opaque and intermediated market that they do, I don't think we'd be having this discussion. But they want to set prices and they want labor to shut up and take it, and that's not acceptable. To that end, yes, this is a fundamentally different thing than a multi-billion-dollar company controlling a market.

[NotPaidToPost]

The article clearly mentions that this is an artificial and concerted effort to increase prices.

To me this does not seem different from taking a longer route to increase the fare.

What you describe would probably be fine if that wasn't concerted. But here they all collude to artificially trigger surge pricing.

[thrill]

Not accepting a ride until an agreed (the rider can always cancel the ride) price is met is entirely different than taking a longer route after a job has started.

[fl0wenol]

Also that's a bit more nuanced a topic because between the driver and the passenger they might agree to take a longer route which could cost more if it's faster, avoiding traffic or whatever.

[NotPaidToPost]

You're avoiding the point, which is the collusion and artificial price increase. That's fraudulent.

Edit: Whether this is a "regulated market" is a red herring and irrelevant.

[eropple]

"Fraudulent" is a word that means things. Can you please substantiate your claim beyond just the assertion?

[free652]

Drivers don't set prices, Uber and Lyft do. Uber can keep prices lower and hire employees if they want.

[pyrale]

It would if Uber was a regulated market. However, it is not, and Uber will never support making it so.