Uber and Lyft Suggest the Days of Cheap Rides Could Be Over

&gt; ...the company’s upcoming pricing algorithms, which they hinted might be able to more precisely predict what riders might be willing to pay for a ride.<p>I hate the whole idea of this. If they track you around, maybe realize you order from fancy places on uber eats, then they will raise prices on something that costs them the same. There&#x27;s something that strikes me as especially awful about automating the &quot;how much is this <i>individual</i> willing to pay.&quot; It&#x27;s like the worst parts of searching for air fare.<p>Yet another reason to advocate for privacy, so they can&#x27;t just buy records about you to determine your price sensitivity from the rest of your life.<p>If everything everyone bought had perfect information on what they&#x27;re willing to pay, I wonder what markets would look like. Would getting a raise immediately cancel itself out?

Honestly, it&#x27;s probably for the best. Over the last decade it has become the expectation that - at the tap of a button - a taxi will appear and take you across the city (or three blocks over) for a few bucks. People need to realize that this isn&#x27;t reality. The entire industry has been subsidized by VCs and desperate drivers working below minimum wage since day 1.<p>If, after paying drivers fairly, complying with local laws, reaching profitability etc., we find that prices are where most people can still afford to take Ubers everyday - great! If not, well, that&#x27;s how things have been for ~150 years. Keep urging your city to invest in public transit and bike lanes.

I&#x27;m fine with paying taxi prices with uber and lyft experience. The taxi experience was awful. Spotty acceptance of debit cards, racism, half truths from dispatch. They were insulated from innovation for so long

I&#x27;m from Romania and a taxi&#x2F;Uber ride is somewhere between $2 and $5, which is pretty cheap compared with other countries.<p>I used to ride with Uber and Bolt a lot, however they&#x27;ve been raising pricing during rush hour and I&#x27;m not stupid enough to not notice the bill at the end of the ride and these costs add up.<p>So several months back I stopped taking car rides altogether. I walk a lot, I don&#x27;t mind walking 3 Km on foot. I ride my bike to and from work, which is actually more efficient than driving a car in this city. And now in winter due to weather I also use public transportation. I also have a driver&#x27;s license and own my own car.<p>I&#x27;m not worrying about prices set dynamically. People can notice the bill and Uber is not competing just with Lift or taxis, it&#x27;s competing with walking on foot, with public transport, with owning your own car and if their prices aren&#x27;t reasonable, they won&#x27;t survive.

This article’s a couple months old, so it misses what I think is going to be a lot more definitive against Uber&#x2F;Lyft.<p>That is, workers are starting to <i>successfully</i> unionize. Both companies have delayed it as long as possible, but it’s going to happen. And when it does, it will either burn more of their cash or up the customer cost.

Pretty crazy with Juul, WeWork, DoorDash, and Uber &#x2F; Lyft all struggling (or showing their true colors) that all the things they sought to kill are coming back. Taxis, cigarettes, picking up your own food! It&#x27;s amazing to me that people were having food delivered from a half mile away.

If two companies that have been operating at a loss for N years simultaneously stop, is it price collusion?<p>There are lots of factors here that could drive a decision to raise prices: both went public this year = increased scrutiny, moviepass &amp; wework fiascoes = decreased tolerance for bad business models, driverless experiments have failed.<p>But it also feels like there&#x27;s a wink happening.<p>If the DOJ &#x2F; courts takeaway is &#x27;yes it&#x27;s collusion and they&#x27;re getting slapped with a company-killing fine&#x27;, it has interesting implications for the ability of unicorns to operate at a loss for long periods.<p>Effectively banning negative unit economics for large companies would be a new chapter for the startup economy.

This policy has actually been pretty great for me. Ubers that once cost $4-5 started costing $10-$15, so I started walking and taking public transportation more.<p>Actually ended up getting to places faster than taking Uber, since I didn&#x27;t end up waiting 10-15 minutes for the Uber to work its way through traffic to me, or the extra 10-15 minutes taking an Uber would entail due to drivers missing turns or getting lost (despite having a phone providing directions right in front of their faces...).

Prices have been more expensive than traditional taxis in my market for over a year now.

I&#x27;d say, once people stop dumping money into these companies and they can no longer operate at a loss, the real price of a ride&#x2F;delivery will become clear.

Here’s how I wish Uber pricing worked:<p>When I hail a ride, I say: I’m going from A to B and am willing to pay C (which Uber can recommend to me) for it.<p>Now if nobody responds, I increase C until they do. This way the drivers know where they are going, how much I’m paying, etc. When a driver “accepts” a ride, I see their vehicle and rating, and get to choose from the people who have accepted.<p>And on the other end, they bid on my ride. If I offer $20, they might ask $25 instead, and it is up to me to either accept or reject that.<p>I really want a system where the drivers are happy, the riders are happy, and everything is transparent and open for negotiation.

I&#x27;m having trouble articulating my thoughts about this. Here we have 2 companies losing many hundreds of millions of dollars per month, and everyone here is losing their minds that they want to raise their prices. Price discrimination is just the market side of progressive taxation: everyone agrees that the rich should pay more, but not when it comes to cab fares? If you don&#x27;t like the price, don&#x27;t pay it: Uber v. Lyft is a false dichotomy anyway and ignores all the other cabbies in the market.

&gt; “We are focused on improving profitability in this market.”<p>Seems like some kind of collusive price signalling announcement to Lyft. Eg, “we’re going to up our prices, here’s your chance to do the same”.

Hopefully this bullshit opens up a new market for digital obfustication services. Pay me $100, I will show you how to save $300&#x2F;yr in Uber fees by changing your digital appearance.

In theory if I check both Uber and Lyft the price of one or the other should be lower since they want my business to offset their fixed costs. The price I am willing to pay Is simply the lowest price I can get for the service.<p>How rich I am has nothing do with it per se.<p>So when does it turn into price fixing when they both independently figure out how much I am willing to pay and charge the same amount?<p>Right now they are uncannily good at charging the same amount for the same trip. Maybe the price is already competitive?

The article was written back in August, so are we already seeing the higher prices?

Prediction: this is going to lead to an antitrust investigation at some point. In fact, it may present a catch-22 from a pricing algo perspective:<p>a) the algos don&#x27;t collude, but simply adjust driver &quot;supply&quot; in particular geos across each other&#x27;s platforms via surge adjustments until they act like they are colluding; or<p>b) the algo designers try to make their algos not collude and they inadvertently use data from the other platform that is nonpublic or in a way that can be determined to harm consumer welfare.<p>Both a) and b) create a situation where every pricing decision by the algorithm - in every city, across every driver&#x2F;rider interaction - has to be done in a way that is not collusive. All the DoJ has to do is find an anomalous pricing pattern - which isn&#x27;t hard - and then pin both these companies with a fine and onerous compliance regulations. Ironically enough, this may be what kills them.

The day cheap rides are over is the day that uber and lyft are over.

Surprise! Now that they&#x27;ve mostly killed off taxi companies, their rates will be the same as taxi companies. Who could&#x27;ve seen that coming? Oh wait.

inevitable. After spending the last year or two without a car at all, in part &#x27;cause lyft and uber had started subtly raising prices, I bought a car a few months back.<p>I mean, I was a little sad, it was really really nice being driven everywhere... but fundamentally, I&#x27;m not quite rich enough to pay market-clearing prices to get driven everywhere. My own impression was that for the last few years, softbank has been subsidizing my own luxury rides, which was really nice! but it was also obviously not sustainable.<p>my own observation all along was that a lot of the price variation was &quot;specials&quot; - it used to be I could count on some discount several times a week. the biggest price increase I experienced, the one that pushed me to buy my own car, was seeing fewer of these.<p>Interestingly, now that I have a car and only use uber&#x2F;lyft when drinking or otherwise away from a car, I get more discounts and specials again.<p>From talking to drivers, it&#x27;s similar for them; a significant amount of their income consists of specials, for doing X drives in Y time period.

Gee, maybe it could be a good idea to order a Taxi instead of a Uber.<p>When the investors stop propping up Uber and Lyft, both will collapse like they&#x27;ve never been, leaving both investors and drivers high and dry. While the company managers laugh all the way to their banks.

Solidarity. Noice. Didi &#x2F; Ola are still subsidizing. I can&#x27;t remember the exact pitch but an Uber driver pitched me the other day on a Didi deal to install the app that was insane.

Rideshare can be profitable for everyone just like Craigslist is. The problem is that Uber and Lyft decided they were large enterprise with a SMB profit model. You could gut 80% of either and if all you had left was drivers making good wages and the service fees for using the app to support the backend you&#x27;d be sitting in a lucrative spot. Yet both companies jumped in way too far and way too early. R&amp;D at Uber hasn&#x27;t delivered and they&#x27;ve continued to burn cash. WeWork, Uber, Lyft - all built on a greed model. Most drivers that I&#x27;ve talked to in the last few months complain how their pay stays the same or goes down and the ride prices continue to increase. These companies are like cancer: just there to take as much as they can and hopefully steamroll the real drivers that bootstrapped them into autonomous ride services. If Uber&#x2F;Lyft fail someone else will come back around to pick up the key pieces that can work. But for now your &quot;cheap rides are over&quot; - because Uber and Lyft have decided that is the answer to the problem they&#x27;ve created.

They already charge more than a regular yellow cab in New York. Hopefully this price hike will inspire folks to turn back to the cheaper local option.

I realize I&#x27;m in the minority on this, but I think both of these companies will be gone 5 years from now.

Do they feel like they&#x27;ve put enough taxi companies out of business that they can now raise heir rates?

This just feeds the blackmarkets for any industry. When people get wise they turn to the black market.

I think it is still a race to the bottom while you can get all rideshare prices in google maps.

&gt; more precisely predict what riders might be willing to pay for a ride<p>It&#x27;s weird to me that this sort of price discrimination is legal.<p>E.g. given this information, my incentive as a rider is to never tip (so that their algorithm doesn&#x27;t identify me as &quot;willing to pay&quot; more). Maybe I could also make a new Lyft account every time I need a ride?

does this work both ways? can we get cheaper prices if we are not willing to pay more and when it is not very busy.

Oh yeah, back to the black cabs then :)

&quot;When will these darlings of Silicon Valley begin to turn a profit?&quot;<p>The funny thing is criticism of these two companies has been vociferous on Hacker News since the very beginning. I&#x27;m not sure what company I&#x27;d even call a darling. Every example I can think of FAANG, Dropbox, Slack, etc all have various criticisms. Perhaps Spotify? But it&#x27;s not a Silicon Valley company.

This is untrue. Without a doubt, with autonomous vehicles, efficient energy usage, storage and harvest via non eco damaging sources like solar power, the cost of rides will get cheaper.

It would not work in some areas due to the collective demographical mindset: having said that; Uber simply does not utilize a very obvious solution that would Greatly increase revenue without raising fares for riders.<p>Insofar as what they burn on being the peeps that figure out self driving cars... I mean that&#x27;s looking to hit the sweepstakes. Chances are They won&#x27;t be the ones to cash in that particular ticket.