The worst thing is that you can't even do a chargeback, otherwise you get banned. There is no recourse for the consumer. If this is their solution for fighting chargebacks, they should get banned from accepting Visa / MC / AMEX.
Another sketchy practice: if you get Uber Cash through a card like Amex, when you go to use it the price for the ride is automatically $15-$20 more than someone who doesn’t have an Uber Cash balance.
I’ve checked this side by side with colleagues at the airport getting ride quotes to the same hotel. When you have Uber Cash they will quote you more. You can find numerous Reddit threads on the topic as well.
I remember the days when Uber prices from SF to anywhere on the peninsula would suddenly spike exactly a minute or two after each Caltrain departed. If you just missed the train you paid a lot more.
And then the many times that Lyft violated the triangle inequality in pricing: Ride from A->B followed by a ride from B->C was often cheaper than a direct ride from A->C, if you knew how to pick B correctly. I once confused the hell out of a driver when I got out and got back in the same car at some nondescript spot.
> That doesn’t strike me as malicious. If you just missed the train, other users probably did, too.
You may not have started with malicious intent but you may have unintentionally created a malicious algorithm that learned to squeeze profits off of lower income people who normally take the train to save money but just missed it.
When the train leaves, some people miss it. They then use the app to hail a ride. The increased demand leads to a corresponding increase in price. This is how surge pricing works. What you seem to be suggesting is that this is inherently predatory, but it seems more likely that it’s just the result of a large number of people requesting rides at the same time.
What I am suggesting is that whether or not the people are predatory, they created a system that is mathematically predatory.
In the pre-Uber world taxis would line up, the fare wouldn't be any different whether or not it is just after a train left, and more drivers would just know that there is higher demand at that location at certain times, without fare surges.
I do love being able to hail rides with a phone app, but I detest this fluctuating pricing.
It reminds me of why I like train travel in other countries but not so much in the US: In almost all of Europe and Asia, train tickets are fixed price based largely on distance travelled and class of train. In the US, Amtrak plays the idiot capitalist game of predatory money grabbing you if you need to make last minute emergency travel plans or changes.
Going by pure economic theory "dynamic pricing" actually benefits both buyers and sellers in a marketplace. There are plenty of cases where it makes sense – lunch menus at restaurants, grocery store coupons, retail bargain bins, dollar menus, happy hour deals, senior/youth/student discounts, even surge pricing in Uber & Lyft. Of course like with every aspect of economics how something is implemented matters a lot more than how it sounds on paper. Especially in the case of rideshare/food delivery, where the middleman has all the data and makes all the decisions.
Yes. This is why getting an Uber is merely expensive instead of impossible on rainy days or on New Year's Eve.
Dynamic pricing makes it possible for both riders and drivers to respond to changes in supply and demand. If prices were static, many drivers would prefer to go to a New Year's Eve celebration themselves than work, but when it becomes their biggest paying shift of the year, they're a lot more willing to do it. Riders have to pay a bigger price if they want a ride at peak times, but it's still possible to get one when they really have a strong preference to.
Wouldn't perfect individualised dynamic pricing mean that the seller (Uber in this case) would get to capture the entire consumer surplus? Is that good?
Yes but also that some people would be getting a service that they otherwise wouldn’t be able to afford. But there’s little/no incentive for a pure seller to do that, although for a marketplace like Uber there is more possibility for that, in order to maintain liquidity on the other side of the transaction. I listened to an interview where Uber CEO Dara K note there is always an incentive pool, and based on the market it is either riders or drivers who are getting the incentive money at any given time.
Prices are always dynamic in every business. The only difference is in how frequently the price changes.
If you take your idea to the logical extreme then you're essentially arguing for permanently fixed prices. This is one reason why it's sometimes impossible to get a taxi in places where the rates are fixed by government edict.
I don't think we're referring to the same concept. Dynamic pricing implies charging two different concurrent customers different prices for the same good or service. The only place you can see this now are basically reward/promo/point programs, which while also gross (basically, making transactiobs cheaper for the rich) at least seem to have some proponents.
> Dynamic pricing implies charging two different concurrent customers different prices for the same good or service.
That is price discrimination, not dynamic pricing. Price discrimination involves charging more or less based on the buyer’s perceived willingness and ability to pay. Dynamic pricing is based on fluctuations in consumer demand. A taxi ride at midnight is not the same as a taxi ride at noon; if there are proportionally fewer drivers available at midnight, fares will be higher at midnight.
The same principle may be applied in the restaurant industry; kitchen throughput has limits. If these limits are reached during peak hours, the restaurant can either raise prices during these hours or reduce prices outside of these hours to spread out the consumer demand, maximizing earnings during peak times while reducing kitchen idle time during off-peak hours.
You are thinking of price discrimination, which is a subcategory of dynamic pricing. Changing prices based on time of day, current demand, tiers/SKUs or really anything else is also collectively dynamic pricing.
Price discrimination isn’t a subcategory of dynamic pricing. Dynamic pricing is equivalent to what is colloquially referred to as surge pricing, whereas price discrimination is based on the buyer’s perceived willingness and ability to pay.
Dynamic pricing could technically fall into the category of price discrimination if the discrimination is temporal (e.g. people who need a taxi at 8:00 AM pay more than people who need a taxi at 8:00 PM), but generally price discrimination refers to changes in price based upon anticipated demand, whereas dynamic pricing refers to changes in price based on actual demand.
I would probably call this "charge discrimination", which gives a clear indication which side of the party is empowered with this concept.
Still, wildly volatile pricing is also an excellent reason to avoid taxi apps. Why politicians have no desire to rein them in is baffling. I guess the stock market is really all that matters at the end of the day....
In theory surge pricing should bring more drivers into the area making the service better for riders. Not sure how much that actually works out in practice though without data only Uber really has.
Surge pricing in theory incentivizes more drivers to operate during peak times, reducing wait times for passengers. If you’ve used these kinds of apps in regions where they aren’t popular, it can be quite common to not have anyone pick up your fare.
If you could bid up the price, you would be more likely to incentivize any idle drivers to pick up your fare. A driver might not be willing to get out of bed for a $10 fare, but the same driver might be willing to get out of bed for a $30 fare.
I have lived in this state for 5 years. Lyft works great!
The full story is I requested a ride to an Air Force base and the driver was not able to take us there due to restrictions at the base. We requested the driver drop us off at a restaurant just outside of the base. The ride we were on was cancelled, a new one created, and calculated as if we were originating at our point of embarkation at the same time all of this happened. Which happened to be during surge pricing.
I tried support for weeks. I was in an endless loop of scripts and going nowhere. At the time, the extra $200 or so charge was a significant amount for me so I charged it back with my card. The card had no issue with this but every time I try signing into Uber, they insist I pay them the remainder of their error from years ago.
I don't think I've ever used Uber. Have used lyft a few times, just to support a relative 'underdog' compared to Uber. Never had a problem. Probably less than 10 rides in the past 3 years though, so I'm possibly not a huge data point.
If you are at the point where your only option left is a chargeback, that is a “burning the bridges” moment anyway. Why would you want to continue doing business with a company that treats you like that? I would be grateful to be banned: it means I don’t have to go to the trouble of canceling my account.
I’ve had to do a handful of chargebacks and I don’t know or care whether they banned me: I would never voluntarily do business with them again anyway.
One reason you might still want to use them is that they used anticompetitive blitzscaling strategies and ran at a loss to prevent competitors from taking off.
I have a friend who had a bad experience with a company once. After drawn out fight for the equivalent of a months salary with lawyers getting involved and threats of collections, the company made a final statement. "We will refund you, but you'll be blacklisted". My friend was delighted, and responded to them as such. He thanked them, since now he wouldn't have to remember their name to avoid ever accidentally buying from them again.
He found a local contractor to do the job instead.
> Why would you want to continue doing business with a company that treats you like that?
They might have a practical monopoly on these services. Most cities are going to be serviced by only Lyft and Uber, with one having more drivers than the other. If you get burned by both services due to their refusal to provide adequate customer service checks on automated systems, you initiate two chargebacks and then lose your ability to call a cab until you pay them the money on the chargeback.
Can confirm. Issued a successful chargeback after they bait and switched the Uber 1 subscription promising $5 for every late delivery only to revoke that portion weeks later.
Support would not refund the yearly subscription despite an obvious change to the economic terms of the subscription and so a chargeback was issued which the credit card company agreed with.
Ransomware screen now on the account to the effect of "Pay $100 Immediately To Regain Your Account" with no transactions possible unless the ransom is paid.
I’ve won every single charge back and yet to get banned. I’m sure it happens but I’m also sure it’s something companies threaten to reduce them since it’s basically an automatic fee they pay. It also hurts their rates if they have a higher rate of chargebacks.
Who is Visa / MC / AMEX going to side with? The company that gets them hundreds of millions of dollars in revenue every year or a random account holder? It doesn't really matter who is right or wrong.
This tidily demonstrates the value of a competent regulatory authority. The payment processor (i.e. card provider) should be even more afraid of the regulator than they are of potential lost business.
Would be nice, except that consumer protections were anyways an afterthought in this country and we just elected a government with an explicit goal to kill them entirely.
I agree about the current government. However, we do have examples of muscular regulatory schemes and infrastructure in this country's past: CFPB and Dodd-Frank are recent good examples. Both could also have been stronger, of course.
Visa / MC are also under monpoloy FTC scrutiny. They've kept out all competitors in he usa, supposedly by threating not letting you accept Visa / MC if you accept anyone else. In places like Japan, Korea, China, Taiwan, Thailand, Mayalsia there are tons of competitors. And because of the competition the fees are much lower to try to lure merchants as well bonuses for consumers.
For individual chargebacks and small scammy merchants, sure. Uber meanwhile processes $40 billion worth of transactions a year. There is zero chance they are facing any kind of "discipline" from credit card operators. At that volume they write their own terms.
Going by that theory why doesn't Visa just jack up their prices by 10x? After all what are merchants going to do, not accept Visa? Turns out yes, that's exactly what they will do. Look at the number of business that don't take Amex for example for the same reason. Large companies especially have enough leverage to negotiate their own deals with credit card operators, like Costco does with Visa.
Costco is a bit different. If I don't have a Visa, i can pay with cash, personal check, or debit card. Sure, I'd prefer to pay with credit card, but it's not a huge deal for me to use a debit card there.
With Uber, there simply isn't an alternative. If they don't accept Visa then i can't use a credit card (or most debit cards, since those go through the visa network too) and there isn't a reasonable way for me to pay at all.
> With Uber, there simply isn't an alternative. If they don't accept Visa then i can't use a credit card (or most debit cards, since those go through the visa network too) and there isn't a reasonable way for me to pay at all.
Uber takes Paypal, Venmo, Apple Pay, and Google Pay too. Any would let you use a bank account. You can also deposit cash into PayPal and I think Venmo as well.
> Going by that theory why doesn't Visa just jack up their prices by 10x?
They (in collusion with MasterCard) could jack up prices and then there's be an antitrust case against them.
Here's the thing, though - as long as they don't abuse their duopoly position, those anti-trust cases are weaker. And a policy of preferring to side with the customer in these disputes is not exactly viewed as abuse of the monopoly position.
You are drastically underestimating the value and control that the processor networks bring.
Wells Fargo might underwrite the credit on my credit card, but I would immediately cancel that line of credit if it wasn’t accessible through the Visa network.
The value of a credit card isn’t just the line of credit, it is the near universal and frictionless acceptance as a method of payment.
You're mostly right, but Discover specifically owns a bank. That bank does underwrite the debt on most Discover cards. Also Amex, but you didn't mention them.
CC companies have little choice. Laws in EU give right/priority to the customer, and the burden of proof to the company. Now, imagine pissing 1 million Europeans, and them all going to their banks and file a complaint. And Uber (or any other vendor) be hit by 1 million claims that they have to fight for one-at-a-time.
