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Uber drivers collude

Uber drivers are supposedly colluding to cause the Uber algorithm to increase fares by logging off en masse.

Dr Mareike Mohlmann, of Warwick Business School, said: “Drivers have developed practices to regain control, even gaming the system. It shows that the algorithmic management that Uber uses may not only be ethically questionable but may also hurt the company itself.”

It sounds like a fair game to me. Any driver who does not participate will have the advantage of being able to snap up passengers first. And higher prices will simply reduce demand. Only people willing to pay more will use the service.

The system works as designed, except that the interface is clunky. A better way might be to allow drivers to set their own prices.

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17 comments to Uber drivers collude

  • Natalie Solent (Essex)

    Thank you! I read an article about the same story in the Times and was trying to get a mental grip on what was wrong with the way the story was presented as “ganging up” or “colluding”. Even though I’ve been a libertarian for years, so much of what I read has totally different assumptions that it often is a bit of a struggle for me to think outside the metacontext as Perry deH would say.

    You’ve made it very clear in a few sentences.

  • Mr Ed

    Here come the RICO charges and wire fraud, 30 years all in Club Fed. Oh dear.

  • It sounds like a fair game indeed !

  • Laird

    Drivers setting their own prices would seriously cut down on business volume. If I call Uber it doesn’t matter to me which driver gets the job, but if I had to worry about individual pricing it would be an entirely different story. The drivers would essentially be competing with each other rather than just the cab companies. One part of Uber’s appeal is that it’s usually a lot cheaper than a regular cab. I couldn’t rely on that if drivers priced individually. I’d probably just call Lyft instead.

  • llamas

    I Predict – when Uber adjusts its code to prevent its drivers from doing (whatever they are doing to game the system to their advantage), those drivers will appeal to regulators to constrain Uber from doing so. ‘Classic’ cab drivers do this at the drop of a hat, we should not expect Uber drivers do behave any differently. While the Uber app effectively destroys classic taxicab monopolies and regulation, their drivers will want the benefits of those monopolies and regulations just as much as old-school taxi drivers do.

    llater,

    llamas

  • Rob Fisher (Surrey)

    Laird, I don’t see any such problems. The user interface would simply show you the cheapest available price. If the driver closest to you wants more money, it might allow you to choose him if you would like to pay more for a faster service. I don’t think it would be onerous at all.

    And why assume prices would go yp? After all, all current Uber drivers are prepared to work at current prices.

  • Patrick Crozier

    I am extremely dubious about this report. I suspect that no collusion is happening at all or if it is, it is one driver trying to get all the others out of the way so that he can hoover up all the fares.

    Meanwhile, here in London, the big campaign by the Hackney cab drivers is to publish photos of all the Uber crashes. There’s no shortage of them. A few years ago I noticed that Prius drivers were the worst drivers on the road. It took ages for the penny to drop that many of them are Private Hire Vehicle (PHV) drivers – so probably Uber. Nowadays, whenever I see a bit of bad driving I check if the culprit is a PHV driver. 7 times out of 10 he is. So much for government regulation ensuring quality.

  • Laird

    You could be right, Rob.

  • djc

    Perhaps I haven’t understood how this Uber thing work, never having used it. But my impression was that Uber is not (and is determined not to be) a taxi company, but a booking agency. It connects people who want a taxi to cabs that want a fare. Pricing depends on supply and demand. If cabs individually or collectively won’t take a fare at the proffered price, well what’s wrong with that.

  • bobby b

    djc
    August 2, 2017 at 8:58 pm

    “Perhaps I haven’t understood how this Uber thing work, never having used it.”

    Uber is essentially a mobile phone program. Drivers log on when available, riders log on and apply for a ride to a destination, and the program finds possible drivers in the area and connects the user to one of them. The amount of the fare is determined by an algorithm in the program that compares distance, traffic, and the availability of drivers. If you are one of many customers looking for a ride at the same time, the price goes way up.

    What these drivers have been doing is to pre-arrange a schedule and order amongst themselves where all drivers in one area except one will log out. When a user looks for a Uber driver in their area, the driver scarcity part of the program bumps the cost up – sometimes substantially – just as you would expect if there are fewer drivers than riders.

    Once that driver has a rider, the next Uber driver logs in and gets their own price-bumped rider. Wash, rinse, repeat.

    It’s just like an old scam run by contractors. In one area close to me, there are only five contractors licensed to do one specific job required in the building of houses. Instead of five contractors bidding on the same jobs and driving prices down, they would arrange things such that only one of them would be “available” to bid on a job that popped up, and, having no other bids to compare, the customer would pay a higher price. They would take turns being the bidder, and this would nicely bump their income. There was always work to keep all five busy, but they eliminated that nasty competitive-bid aspect.

  • I can’t see how this collusion would work that well: if Uber drivers sign out and the surge kicks in, a lot of people will just wait until it goes down again (usually 5-10 mins does the job). And if you’re not signed in, you’re not going to be able to take advantage of the surge.

  • Richard Thomas

    Tim, good point. This may well be one of those things where someone talks about an idea and the media picks it up as a solid fact (with a healthy helping of outrage)

  • bobby b

    It doesn’t work in a bulletproof manner, but it works sufficiently so that it’s been an issue for some time.

    If it only works enough to raise your gross 10%, well, you’ve raised your gross by 10% for no more effort. What’s not to like? If you’re in an area that isn’t flooded with drivers, imperfect driver compliance will still leave fares slightly higher.

  • Achillea

    Australia is Lyft-less?

  • Chris F

    I saw this at work outside the Eurostar drop-off point at St Pancras last week.
    I looked at the Uber app and they were requesting a 1.8x increase in fares due to a surge in demand. Around me there were about six or seven people looking at their apps and closing it to wait. After a few minutes everyone was going back in to see if the “surge” had ended, instead it was now asking for 1.9x increase (probably as we were all accidentally in sync).
    All the while there were at least 8 Uber drivers parked and waiting who did not show up on the cars available. I am pretty sure that they were all working together trying to force the surge and were going to take the fares one by one.
    I lost patience and took the tube, though at 1.8/1.9 surge increase I could have taken a black cab for less than Uber.

  • CaptDMO

    Once I had mastered the programming, and operation of a CNC table router, one of the first things I needed to do was learn how to lie to it, in order to make it do what I WANTED it to do.
    Te FIRST step was “Don’t consider this a Computer controlled router, consider it an “assorted weapons platform”.
    The SECOND step was LIE to the “justification parameters” (exactly WHERE is zero?)

  • patriarchal landmine

    so illegal minicabs aren’t illegal over there anymore? that’s nice.

    welp, this might work as long as one driver doesn’t enter independently to compete. iirc uber drivers are basically average people who participate in uber to earn a little extra money. the only reason I can think of for spending 80%+ of your time not driving just to increase an individual fare 10% is that you don’t really want to work for a living.