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by chrisseaton 1911 days ago
> Uber drivers need to be allowed to set their own prices

Yikes this seems terrible for the drivers. There would be a race to the bottom surely with the most desperate drivers who perhaps just need to make a mortgage payment today undercutting everyone else.
3 comments
dash2 1911 days ago
The same laws of supply and demand also explain the price of employee labour, no? The big question is whether one price beats flexible pricing. It's not obvious that having a single price for all Uber drivers would benefit everybody, presumably it would have deadweight costs by pricing some drivers out of the market.
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chrisseaton 1911 days ago
The difference is most people aren't providing their labour with a pricing model this dynamic.

If I look for Ubers and one is offering rides for 50p I'd take it, because the result should be the same as anyone else offering something more expensive and I have no relationship with my Uber driver.

If a gardener stats to offer gardening services for 50p an hour I wouldn't go with that, because I have a relationship with my existing gardener and I'm suspicious how quality someone can be for 50p an hour.

See the practical difference?

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dash2 1910 days ago
I see your point. It sounds as if you agree that in Uber's case, flexible pricing is appropriate. Or do you think that Uber should price its cabs flexibly but pay a flat rate to its drivers?
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johannes1234321 1911 days ago
The implementation I have seen is that there is a minimum price, but drivers can set higher prices, if they like. (Which in reality means that they can't set the price at all)
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KptMarchewa 1911 days ago
Usually yes, but there are a lot of moments when the prices can be hugely increased after pandemic - and are now increased by surge pricing.
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MaxBarraclough 1911 days ago
A valid point, but shouldn't this competition on price (i.e. race to bottom) also apply at the level of Uber and its competitors?
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chrisseaton 1911 days ago
A large company like Uber is going to be relatively stable in terms of cash-flow, access to credit, etc day-to-day. If they do sell under cost it's usually part of a longer-term plan.

An individual driver may have a loan-shark threatening to break their fingers for a repayment that day.

I think individuals are going to be much more volatile and so create a worse race to the bottom.

Maybe let drivers set a price above a floor? Could be like their own surge pricing.

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