Opinion

Felix Salmon

Uber and the cognitive zone of discomfort

By Felix Salmon
January 3, 2012

If you spend a fair amount of time among privileged dot-com types, you’ll probably be familiar with Uber, a kind of luxury car service for the smartphone era. The idea is that you pull out your iPhone, punch a couple of buttons, and in a few minutes a swanky black car pulls up to drive you to your next destination. You get out, no tipping, and the cost of the fare is automatically charged to the credit card you have on file. Elegant!

You do pay for that convenience. An Uber cab costs significantly more than you’d pay for a taxicab, and I’ve met a lot of people who suffer from Uber sticker shock. I’m one of them, truth be told: after getting charged $43 for my first Uber cab ride, last month, I haven’t used it since. I probably will at some point, when the trip is shorter or when it’s raining or when I’m stuck in the middle of nowhere and there’s no easy way to get a cab. But if you start getting into the habit of using these cars on a regular basis, that habit can get expensive fast.

Uber doesn’t seem to have worked out how it wants to deal with the central question of cost. On the one hand, it’s positioning itself as “everyone’s private driver”: it basically stands in relation to the chauffeur-driven car as NetJets does to the private jet. And compared with the cost of hiring a full-time car and driver, Uber is certainly dirt cheap.

On the other hand, Uber doesn’t like being told that it’s out of reach for people without a lot of disposable income. When Marlooz, a soi-disant “poor freelancer”, said that Uber was “too expensive” for her, the company responded with a 1,750-word data-filled blog post explaining how, even though Uber costs twice as much as a cab, it’s still a good deal. Especially if you’re calling for a cab in San Francisco on a weekend evening, when most of the time the cab you called won’t even turn up.

But the fact is that Uber is too expensive for most people. Hell, taxis are too expensive for most people. Uber is a luxury service, and they charge accordingly. Cab rates aren’t entirely apples-to-apples, but they generally have three components: a fixed base fare, and then a rate for time and a rate for mileage. The meter works out whichever is the higher, and charges you that. And if you compare Uber’s rates to the taxi rates in San Francisco, New York, Boston, Chicago, and Washington, you can see that Uber is a lot more.

 

San Francisco Base fare Per hour Per mile
Uber $8.00 $75 $4.90
Taxi $3.50 $33 $2.75

 

New York Base fare Per hour Per mile
Uber $7.00 $57 $3.90
Taxi $3.00* $24 $2

 

Boston Base fare Per hour Per mile
Uber $7.00 $51 $4.00
Taxi $2.60 $28 $2.80

 

Chicago Base fare Per hour Per mile
Uber $7.00 $51 $3.50
Taxi $2.25 $19.80 $1.80

 

Washington Base fare Per hour Per mile
Uber $7.00 $45 $3.25
Taxi $3.25* $15 $1.50

*includes $0.50 in surcharges

The other thing which becomes clear when you look at these prices is that Uber raises its prices pretty much in lockstep with local taxi rates. The cheapest Uber cabs — the ones in Washington — are still significantly more expensive than the most expensive yellow cabs — the ones in San Francisco. But on an absolute basis, it’s easy to see why people in Washington feel happier grabbing an Uber to get home than people in San Francisco do. If you get stuck in traffic and it takes 30 minutes to get home, that’s $29.50 in Washington; in San Francisco, it would be $45.50.

On top of that, Uber has dynamic GPS-based pricing which automatically charges you on a per-mile basis whenever the car is going faster than 11mph, even if it’s only for a brief period of time. And then of course there’s the fancy surge pricing that we saw on New Year’s Eve, when people started getting charged exorbitant rates — Brenden Mulligan, for example, got charged $75 for a ride which took just 136 seconds, and Dan Whaley got charged $135 to go 12 blocks.

Uber loves to explain its surge pricing with fancy supply-and-demand curves, but you could call it a “rip off drunk people” strategy too. Mulligan has ideas about how Uber’s software could be improved: at the very least, it should display the current minimum fare prominently, rather than just the current multiplier.

But this gets back to my disagreement with Jacob Goldstein and Matt Yglesias about the wisdom of deregulating taxi rates. They reckon that deregulated fares are a great idea, while I think they would be chaotically disastrous. And I think that the experience of Uber on New Year’s Eve — which has resulted in a significant number of refunds for unhappy customers — is important here. Uber’s customers are as savvy and sophisticated as cab passengers get, and Uber was genuinely trying hard to be transparent about pricing. After all, if surge pricing doesn’t reduce demand at peak times, it doesn’t really work. And it only reduces demand if people understand what they’re going to pay.

But Uber got a fair amount of bad press from its New Year’s experiment, and of course its fares 99.9% of the time — just like the fares of other deregulated companies like those in Stockholm — are set and fixed. That’s good business: Uber provides a valuable service by allowing people to know, when they’re out and about, that if they want to call an Uber cab, it will take them home for roughly twice the cost of a taxi.

If Uber pricing was continuously dynamic, prices might well come down during periods of light demand, especially in the early mornings. But our brains hate having to do dynamic cost/benefit calculations. Instead, we rely on simple heuristics: “I should always take the subway if I can”, “cabs in New York are cheap enough that I can take them when I want to”, “cabs in London always cost more than you think they will”, “I can afford Uber if it’s just a short ride”, that sort of thing. When we think about the costs and benefits of various different types of transportation, we don’t actually think in dollars, most of the time, just in terms of a vaguer cheap/expensive spectrum. Dynamic pricing like Uber’s New Year’s experiment takes us out of that comfort zone, and people hate being forced to re-think these things.

It’s nearly always a bad idea, then, for companies like Uber to implement variable pricing: it forces customers to think too much, and it invariably happens on nights when demand is high precisely because lots of customers are inebriated and therefore in no position to drive. Or overthink things.

But from the point of view of the passenger, Uber itself adds a whole new level of complexity to what used to be a relatively simple heuristic. Most of us understand pretty intuitively what the differences are, in terms of costs and benefits, between walking; taking public transport; and taking a cab. But then if you move to Stockholm, or if you start using Uber, things become much more complicated, since now you need to work out the tradeoffs between various different cab options. And those tradeoffs, as Bradley Voytek’s Uber blog post explains, get very complex very quickly, and involve things like whether you’re calling a cab or hailing it, your expected wait time, and the probability of a called cab turning up at all.

It takes a long time to turn all of that into an unthinking heuristic, and in the meantime Uber’s customers will always feel as though they’re ticking the “none of the above” box, rather than simply expanding the menu which is currently hard-wired into their decision-making apparatus. And that I think helps explain why many people remain uncomfortable with Uber, even if they’re exactly the kind of people who should love it.

Uber is a great idea in theory, and the mechanics of it tend to work well in practice. But Alex Rolfe has an important point: if Uber’s prices came down to the point at which they were vaguely the same as a taxi, then we could just lump Uber in with cabs as far as our mental heuristics are concerned. Because Uber’s prices are as high as they are, however, and because when they change they go up rather than down, customers react with snarky hostility.

Uber, in other words, is a car service for computers, who always do their sums every time they have to make a calculation. Humans don’t work that way. And the way that Uber is currently priced, it’s always going to find itself in a cognitive zone of discomfort as far as its passengers are concerned.

Update: Rocky Agrawal adds some very smart comments. A taster:

When people feel ripped off, they don’t want to hear about economic theory or the team of Ph.Ds you have developing optimal supply and demand mechanisms.

Most people have a sense of what is “fair”. Study after study has shown that people will make suboptimal economic decisions in the name of fairness. Product and pricing decisions have to take that into account…

I’m disappointed that Uber didn’t turn New Year’s Eve into a positive marketing opportunity. I would have strongly advocated subsidizing rides with some of the company’s $32 million in new funding (from Amazon CEO Jeff Bezos, Menlo Ventures and Goldman Sachs) to create a delightful customer experience. The company is young enough that it could benefit from positive customer feedback.

Comments
30 comments so far | RSS Comments RSS

Does the Uber app give you the option of locking in a fare from the app? Uber would then be taking on the risk of traffic, but they would be able to account for that in the pricing scheme. You tell it where you are, where you want to go, it tells you how much it will cost, you get in and, as long as you go exactly where you asked to go in the app, you pay exactly the price that was quoted you. That seems like one option to deal with the cognitive load of variable pricing, in car service or taxis.

Posted by cooperowl | Report as abusive
 

Great article that I think has major relevance beyond just this one company and scenario. Introducing pricing complexity seems to be the new method for extracting as much money as possible for a good or service. I think this quote of yours sums it up nicely:

“But our brains hate having to do dynamic cost/benefit calculations. Instead, we rely on simple heuristics: ‘I should always take the subway if I can’, ‘cabs in New York are cheap enough that I can take them when I want to’, ‘cabs in London always cost more than you think they will’, ‘I can afford Uber if it’s just a short ride’, that sort of thing.”

Other examples of this effect are fees. Airline baggage fees, bank fees, mobile phone fees. All of these are simple tools to make it more difficult to do a simple cost comparison between two similar products. People tend to despise them and they generally only seem to work for industries where people don’t have (perceive?) much choice.

An example of this in reverse was Netflix. There were a million VOD services before Netflix entered the streaming service but none of them took off because they were all ppv. Then Netflix came along and offered it’s fixed monthly price service and its popularity took off. Of course, now that they’ve started jacking around with their pricing, people are starting to realize that they’re no different.

Posted by spectre855 | Report as abusive
 

An Uber executive recently compared their up charge to the increase in cover charge at a bar on New Years, from say $20 to $100. While that comparison sounds good at first, the difference is at the bar, you knew ahead of time what you would pay, and had the chance to walk away! Border-lining on professional dishonesty, Uber did little to tell people about the hike in advance (and in most case appears to have done their part to hide the information), resulting in the onslaught of complaints the next day when people woke up to bill on New Years Day that was likely more expensive than dinner the night before.

I had once such experience with my girlfriend that night. After hearing that other people experienced a similar fate, we decided to write a letter to Uber. I thought you might be interested

To [Representative],

Thank you for getting back to me quickly. I understand that Uber needs to increase prices based on simple supply and demand, but this is not the business practice I take issue with (although regardless of the convenience and reliability of your service, charging someone up to 6x the price of a normal cab ride is so far beyond reasonable, I seriously doubt you’ll continue doing this during “surge” events).

For some background, I was actually a part of an Uber ride once before, on a normal night in NYC, where a friend called a car from his account. The service was fantastic! All of us were shocked at how fast, easy, and professional the entire experience was. In fact, it was the memory of that ride that made me think to use it again last night. But from the registration process, to account activation, through using the app that night, nothing appeared to be different or out of the ordinary. In short, there was no indication that prices were “surging” for New Year’s, and I never thought to scour the internet at 2 a.m. to investigate your blog posts, FAQ, or Twitter feed in case you happened to have a price hike system in place I needed to be aware of.

And so, the problem I have is that the “surge” event pricing was not conveyed to me at any point in time before my ride to allow me to make an informed decision. Had I known the potential cost, I would have walked home, or flagged down a car service myself. Or heck, bought a bicycle, for what it ended up costing me.

But from Uber’s perspective, that’s obviously the point. What would happen if you told customers upfront and unequivocally that the price of a ride was currently 3x, 4x, 5x, 6x the normal price before they called the car? Naturally, you’d lose half the “surging” demand in a split second! It is the calculated and deliberate decisions to avoid informing people of the cost upfront that translates into the ability to keep demand high, and thus charge ridiculous prices. Your “surge equation” would never get to 6x if we were all playing fair here. Hiding behind a bunch of “fair market value” mumbo-jumbo doesn’t make it any more palatable. This isn’t rocket science, there are plenty of ways to keep people informed…

To that last point, I did a fair amount of research into this situation following my initial email to you, I have uncovered several explanations of your dynamic pricing, and the ways in which you communicate this to your customers. I wanted to confirm that I was not mistaken in my experience. I was not. In all cases, Uber dropped the ball on New Years.
1. You mentioned in your email to me that you send text messages to confirm the price increase is ok. I never went through that process (although that’s exactly the kind of thing you should do). I would like to see confirmation that you communicated this to me. The only texts that I received from “827-222″ were;

Text 1: Hi —, thanks for signing up with Uber. Please reply with the word ‘go’ to confirm your mobile number
Text 2: Hi —, your Uber is in route! J.H. (4.2 stars) of On Line Limousine, LLC will pick you up in 7 minutes
Text 3: Hi —, if you want to cancel your ride, please text ‘cancel’. Otherwise, please wait for or call your driver, 6463618888
Text 4: Hi —, your Uber is arriving now!
There was nothing communicated to me in these texts about an increased rate.

I also received a welcome email, for me to authorize my account information. So, if I am a new user who signs up on New Year’s, I would have no clue that you increase prices at all, let alone understand anything about the way your novel, dynamic pricing scheme works.

I had a friend forward me an email he received from Uber (I never got this one, either) that says “This means that rates on New Year’s Eve will likely increase during peak times of demand BUT when demand subsides or more supply becomes available, rates will automatically drop and you will ALWAYS know if there is a price increase before you request an Uber. In the past, cities have seen an average price multiplier around 1.5x your typical fare.”

- Very curious how you notify people, if it doesn’t include a pop up notification, a text, or an email. I received nothing.

- The email goes on to say “typically 1.5x.” My charge was 4X. I’ve read since that the increase can be as high as 6x! Why not mention this in the email too? Sure, creative word-smithing certainly covers your behind, but it’s so misleading that I can only assume it was done intentionally to limit the extent to which people would become weary of the increase in the first place.

2. I never noticed this on the app itself on New Years, but apparently for Halloween you had a pumpkin icon in the top right corner of the screen, where clicking on the pumpkin showed the “surge” was in effect. Most people would probably assume you were being festive with that icon, and not realize that they had to click it at all. Again, lame attempt to appear transparent. Did you do this for New Years, too?

3. I have read that you have pop up notifications to warn you of “surge” events, but the default has these notifications turned off. Again, Uber clearly decided you would prefer that the majority of people who don’t think to check the settings will leave the notifications off, thus ensuring demand will remain high when people are likely to want cabs the most. Strategic, sure. But also manipulative.

At the end of the day, I have taken the time to write this email because I think you offer a great service, and Uber has the potential to be highly successful. But, New Year’s Eve was an example of exactly how NOT to do it. For all the success you’ve received through positive word of mouth, you owe it to your customers to treat them fairly.

Posted by fraisercrane27 | Report as abusive
 

My own non Uber experience is that black cars lowered their fares in 2008 and now for many of my trips they are cheaper than cabs. For example, about $15 cheaper to or from Newark Liberty than the cab line. These are not “on demand” trips like Uber, but they use a flat pricing scheme that they vary occasionally to manage capacity and profits. My own travels suggest that for airport trips black cars can be cheaper than cabs in NYC, SF, but not in Dallas or Chicago. Maybe there is a mixed model here.

Posted by FerdinandBull | Report as abusive
 

As someone who travels to these cities (well, I live near Boston, so that doesn’t count) on business perhaps a dozen times a year, this is an option I didn’t know about, and appreciate the info. Perhaps Uber is really targeting those of us who do occasional business travel, and need a reliable option to get around.

Posted by Curmudgeon | Report as abusive
 

It always surprises me how easy it is to wrap an existing product in a smartphone and persuade young people that it’s something new. Manhattan bankers and lawyers have been taking black cars home from those perilous downtown dinners for decades, a necessity since the city has fewer yellow cabs today than in 1937 and important men in suits can’t ride the subway after 8:00. I guess the current batch of clueless nouveau riche yuppies was terrified by the prospect of calling for a car and is very excited that they can now text for one.

Posted by najdorf | Report as abusive
 

I see uber as a way of extending luxury service to a larger audience.

For many years, I’ve used Boston Coach to get to the airport from my house. I had one too many experiences of cabs not showing up – and one time when the cab showed up but the door on the passenger side didn’t close so I had to hold it shut as we drove at 50 mph down Storrow. Weird thing is I know the regulators, the people on our Transportation Committee. They try to regulate but the system isn’t easy to force to fit. For example, the system of renting out cabs by medallion holders means the renter is forced to drag every penny out of the cab each night. This means skimping on cleanliness and not showing for routes that might not earn as much as a bunch of quicker rides. The cab owners keep pushing for rate increases but then they take those out of the renters’ pockets by increasing lease fees. In our town, we limit cabs to companies, no renting, but the cost/maintenance pressures still tend to be imposed by the market as a whole. I’d argue the solution is less deregulating than more regulation of lease arrangements.

Boston Coach costs a lot more. Like 250% more. But the guy is in the driveway waiting for me – or my family – and the car is clean.

Posted by jomiku | Report as abusive
 

Spectre885 is right. You’ve hit on a fantastic scam that has worked across a broad range of consumer services, and is about to become standard in electric power metering. This is sold as “innovation” and “choice” when it’s actually risk-shifting to people who are usually not equipped to handle the decision rationally.

Win-win for a company: no need for a crew of actuaries and other math-heads to set stable prices, so cut those from the payroll, AND you get to take advantage of drunks!

Posted by Eericsonjr | Report as abusive
 

The non-transparency of pricing that Spectre885 and EericsonJr are talking about is not common on Uber. It seems like they only changed to this system for one night, but on those types of nights I’ve heard stories of cabs withholding service without a large guaranteed tip.

I’m a frequent Uber rider in Chicago. It is about 70% more than a taxi. Chicago residents currently are paying a $1.00 surcharge(fuel) for taxi service and then there is a customary 15-20% tip that isn’t included in the prices listed above. So for a typical ride from the Loop to a Northside neighborhood (say 3.5 miles) you might pay 9.55 on the meter plus 18% or about $11.25 (okay I would probably round that down to 11, but on average 18%). And on Uber that would be $19.25 or 70% more.

Is 70% more the appropriate value to place on black car service? I think passengers who consider that to be expensive should find that Uber resides in their cognitive zone of discomfort. And for those of us who don’t, it’s bliss.

Posted by EricG | Report as abusive
 

A $43 bill is sticker shock? Really? Honestly, I find this surprising. New York City is notoriously expensive and people make enormous incomes. (People who make $300K/yr consider themselves middle class). How much does a typical cab ride in New York cost? I just know on television characters are always taking cab rides. I assume they are paying on the order of $50 every time. In my limited number of cab rides in my life – a long time ago and in places like California and Texas – the average cost was about $43. I would think it would be even more today and all the wealthy people in New York don’t think twice about it.

Posted by Crimson2 | Report as abusive
 

Felix, i think you’re a bit harsh on dynamic pricing. It may be a nightmare for hail and go taxis but for pre booked cabs it should be fine in the smartphone era.

For example Kabbee is a London app that workners well: you plug in your location and where you want to go and it returns a list of mini-cab firms, what they’ll charge you and when they’ll get there. You pick the one you want. Or none if they’re too much.

PS For those unaware of the distinction in London the traditional Black Cabs have regulated fares and are the only cabs allowed to be hailed on the street. But pre booked minicabs can charge what they like, agreeing a price at booking.

Posted by DanLondon | Report as abusive
 

No offense Felix, but it sounds like people who should not be using Uber’s service are using it then complaining about the high cost.

Frankly, if they have a problem with paying for a seemingly “cost no object” on-demand swanky black car service, why are they using it in the first place?

Champagne expectations on a beer budget.

Posted by josephmartins | Report as abusive
 

josephmartins,

Uber wants to be the go-to for black car service. If their model is to charge double what the car service should cost and not let you know about it until after you arrive at your destination, then they have a business model problem. I don’t see Uber getting a lot of users, champagne, beer or otherwise, with stunts like this.

Even “champagne” customers don’t like to feel like they were taken advantage of.

Also, in NYC black car services aren’t swanky, they serves primarily the outer boroughs while yellow cabs congregate in the swanky Manhattan neighborhoods. People who call black cars aren’t showing off, they typically don’t own a car and need some way to arrange transportation that wouldn’t be otherwise available (times/locations when it is hard to hail a yellow cab or when the destination is outside of the cabs service area).

Posted by TurtleBay | Report as abusive
 

+1 to Dan London and TurtleBay. The one advantage I could see vs. calling one of the local dispatch services was that they show up as fast as they would if I was a regular and good customer. Being a more regular shmoo in a foreign land means you either have to plan ahead or pay the premium Uber. I suspect that if I worked for one of the large banks I would not have this problem as I would be both a regular customer and I would know to tip well when I called on short notice, a busy night, or killed the driver’s night with a long distance trip.

The comments on the lack of transparency and the desire to avoid math in order to get home are spot on.

Posted by Abnerg | Report as abusive
 

How much do you guys think standard town car competition on a busy night played in to the NYE pricing? Isn’t it possible that without Über charging these high rates, no town car driver would opt to pick up Über passengers? Other than the >$100 extreme examples, I assume a town car could have easily charged $50-75 on NYE. Maybe Uber is in line with standard town car pricing on these “surge” nights.

Posted by ijrc | Report as abusive
 

@ijrc, josephmartins, and others, I don’t think that most people’s problem is with the cost of the service. It’s a town car service, we get it. The problem is that on nye, this service arbitrarily jacked up their rate from it’s normal pricing scheme and there was apparently no way to get notified of this fact through the normal checkout process.

It would be like getting an abnormally huge gas bill one day out of the blue and then getting told by your gas provider that pricing was quadrupled one day because the weather was abnormally cold. It would be one thing of you knew that was a possibility up front but having no warning at all makes it feel pretty scam-y.

Posted by spectre855 | Report as abusive
 

Surprising that while the world dissolves all these pampered types who rarely walk or take a bus have time to wonder whether $43 is expensive for a ride.

Posted by Lissandreau | Report as abusive
 

@Felix Salmon:

As a computer scientist, I think you’re partly missing the point. You’re totally right that people don’t think like this. However, you’re overlooking the elephant in the room… LOCATION BASED SERVICES.

I had a dream, over 20 years ago, that one day I would hold a device in my hand that knew where I was (GPS), I would tell it where I wanted to go, and optionally when I wanted to be there and how much money it was worth to me to be on time; and it would run a query on a database of transport alternatives, taking into account, for the various options:
* Travel times
* Financial value of time spent travelling
* Expense of travel (fares charged)
* Probabilities of transport showing up / stopping for me (bus drivers can sometimes drive straight past passengers waiting at bus stops, taxi firms sometimes do a poor job too as noted in your article, etc.) and probabilities of traffic jams (expressed as statistical distributions, parameterized with real-world data).

If I had access to the investment capital and the data, I would start a business providing this kind of search/calculation service.

It will happen… And when it does, THEN there will be a business-case for companies like “Uber” to vary their rates on a more continuous, dynamic basis; at least for example by offering discounts to customers using such calculation/referral services as of the type I have described. This sort of service will be available in some form, in several major world cities, within the next ten years.

===

Aside from overlooking that possibility, excellent article. Your observations have helped me formulate the pricing model for my next product…

Posted by matthewslyman | Report as abusive
 

p.s. One or two other things that will feed into the kind of location based services I have described… GPS and mobile network access are becoming so ubiquitous now, it’s almost trivial to wire up a bus fleet with transponders showing the control room where they are on their route at any given moment. Many bus, train and underground networks around the world already have electronic signs on station platforms and bus stops showing the real-time ETA of the next buses/trains/trams etc., to various destinations. All we need to do now, is join all of that information up… Join the dots… There’s going to be a lot of consolidation and profit in this industry in the coming years.

Posted by matthewslyman | Report as abusive
 

It’s a neat idea, but Uber is certainly too expensive at the moment for myself. I would love to see Google autonomous driving technology meet with the Uber idea. Knock the driver out and also make the car electric. Now you limit yourself to how far you can go, but if you add Wiitricity charging technology the car itself may be able to charge while it drives, say in a special charging lane. Problem would be, such lanes would have to be set up for this to be possible, meaning possible public works projects. I suppose there are ways around it to make it low cost for the tax payer, to even free (Wiitricity pays for installation, installation costs just get added onto electricity – to the mileage of the car fair.) I’m just rambling however and these thoughts will go unrealized for some time. Either or, perhaps Uber itself will grow in demand and by that would become cheaper and more widespread. It still would be nice to knock out the driver (this also includes knocking out the taxicab drivers, or at least making it so they have to compete with autonomous cars thus finding a way to be even cheaper.)

Posted by Proxyariesman | Report as abusive
 

It’s a neat idea, but Uber is certainly too expensive at the moment for myself. I would love to see Google autonomous driving technology meet with the Uber idea. Knock the driver out and also make the car electric. Now you limit yourself to how far you can go, but if you add Wiitricity charging technology the car itself may be able to charge while it drives, say in a special charging lane. Problem would be, such lanes would have to be set up for this to be possible, meaning possible public works projects. I suppose there are ways around it to make it low cost for the tax payer, to even free (Wiitricity pays for installation, installation costs just get added onto electricity – to the mileage of the car fair.) I’m just rambling however and these thoughts will go unrealized for some time. Either or, perhaps Uber itself will grow in demand and by that would become cheaper and more widespread. It still would be nice to knock out the driver (this also includes knocking out the taxicab drivers, or at least making it so they have to compete with autonomous cars thus finding a way to be even cheaper.)

Posted by Proxyariesman | Report as abusive
 

Sorry for the double post, double clicked by accident.

Posted by Proxyariesman | Report as abusive
 

p.p.s. One other software-patent-spoiler… We already have head-counters in supermarkets working from CCTV. Location-based transport search/optimization services could also factor in how crowded particular buses/trains are, and how crowded the bus stops/ train platforms/ tram stops are (and so, how likely we are to get a seat on the bus/train/tram we would need for a particular transport route)…

As a side note, I’m sick of software patents. Big corporations are patenting mere ideas that were obvious to me as a 10 or 11 year old boy, to ring-fence and corner entire industries from the outset without too much trouble on their part… They’re wrong. How can we combat this menace?

Posted by matthewslyman | Report as abusive
 

@matthewslyman: this is already being done. London Transports mobile website now can detect where you are and gives live bus times for nearby bus stops. I often check before leaving home and if it’s a ten minute wait for the bus i need, chill out for another 5 minutes.

Posted by DanLondon | Report as abusive
 

@DanLondon: I know about that. We have it in Leeds too. There’s a text message service that I’ve used: you ping the server with an SMS containing a code for the bus stop, and it sends you a live list of ETAs for the next 5 or 6 buses expected to pass that stop. It’s been going now for about 5-15 years, hasn’t it?

What I’m talking about here is something different: the next level up from that. Effectively a mathematical search engine that acts as a personal assistant, using a wide array of live data to select the best modes of transport for you (or best combination of modes of transport), taking into account walking, buses, trains, underground, taxis, flights etc. That’s something we haven’t seen yet. You can guarantee that the first-to-market with this will try to apply for patents to cover “their ideas”, even though it’s the obvious evolution of what we already have.

Posted by matthewslyman | Report as abusive
 

Uber started in San Francisco and was successful because it fills a need. The taxi situation in this city is a mess. The drivers are rude, usually on the phone, refuse (illegally) credit cards, rarely display their taxi license, and drive like maniacs. It appears that the city has no inspectors monitoring such activity.

It is always a crap shoot if a taxi shows up when you call for one. Yellow Cab has a computerized service that assures you a taxi is one the way but no-shows are common. On big convention weeks there it’s impossible to get a cab. Long lines are noted outside the big hotels with hapless guests trying to get to the airport.

I’m hardly wealthy but Uber fills a void. I was warned on the mobile screen on New Years Eve that surge pricing was in effect (3X normal price). After searching for a cab for about thirty minutes in South of Market, I gave up and called Uber. The car was there in one minute and got me home(for a whopping $70 compared to a cab which would have been around $18). Was it worth it? Yes. Will I avoid putting myself in that position again? I’ll certainly try.

Posted by Robes40x | Report as abusive
 

This was actually a customer support FIAL.
In an evil way.
The way I see it, the impenetrability of surge pricing is a feature, not a bug.

Drunk people who can’t figure out what the correct price is?

Perfect! Soak them!

But, (!), be sure to promptly and immediately refund / credit / whatever
people who complain. Done properly, you’ll make plenty of money from
people who don’t complain, to more than make up for the rest.

There are plenty of examples of where people do this – Mail-in rebates, mis-labeled prices in groceries, etc.
Ergo, customer support (and/or communication) FIAL.

Posted by dieswaytoofast | Report as abusive
 

Why don’t they just give you the price of the trip before you agree to it. You just indicate on your smart phone where you want to go and they give you a quote. You can take it or get home some other way. If that’s what customers wanted a free market cab system ought to be able to give it to them.

Posted by cMcGillivary | Report as abusive
 

Further to my previous comments, take a look at the section in this article headed “Nokia-created apps”:
http://arstechnica.com/gadgets/reviews/2 012/04/the-nokia-lumia-900-review.ars/3

This is going to be a game-changer for flexible pricing. All we need now is a semantic web – with an agreed XML format – for the advertising of transportation services…

Posted by matthewslyman | Report as abusive
 

I think Uber should show the current Minimum Fare BEFORE the user confirms his/her pickup request… Then when the ride starts the user should see a running meter on his/her phone app to make the transaction fully transparent.

Posted by sisyphos | Report as abusive
 

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
  •