Uber gouges customers in bad weather (again)

The two previous posts here about Uber and its pending entry to the Houston market are among the most heavily-clicked in this blog's history.  Here's the latest on the transportation phone app, first from CNN Money.

Luxury cab app Uber is under fire for charging New Yorkers insanely high prices during last week's snow storm.

Uber, which sends private cars to your location with a tap of a button, raised fares by as much as eight times (last) Saturday, as New York was blanketed with four inches of snow. Minimum fares surged well above $100, and per-mile charges were upwards of $30.

There were no surprises: Uber notified users what the prices would be before they ordered their cabs. Still, the Twitters were ablaze with angry Uberites crying foul. 

Uber calls it "surge pricing".  And from Bloomberg.

Uber is the darling of the technology industry—unless it’s raining. That’s when it raises prices and becomes the whipping boy of the Twitterati. The latest round of outrage over the company’s surge pricing came over the weekend, when rates increased by a factor of seven in New York because of a snowstorm. At one point, Uber was asking riders for a rate of $35 a mile.

An article in Wired on Tuesday broke down the thinking behind surge pricing, as explained by Travis Kalanick, the company’s chief executive officer. It’s basically the first lecture from an Introduction to Economics class:

“To understand the economics of surge pricing from Uber’s point of view, think of drivers as supply and riders as demand. Especially in bad weather, demand goes up: Would-be passengers don’t want to be out in the snow and rain. Meanwhile, supply goes down: Drivers don’t want to be out in the snow and rain, either.

“In that scenario, higher prices are meant to accomplish two things. First, by offering drivers more money, it gives them more incentive to get out on the streets—at least in theory—thereby increasing supply. Second, higher fares price out some riders, and demand goes down. Calibrating supply, demand, and price to get the most people the most rides for the least money is the math problem that Kalanick says Uber is always trying to solve.”

Kalanick told Wired that higher prices facilitate more rides in situations of high demand. “We are not setting the price. The market is setting the price,” he says. “We have algorithms to determine what the market is.”

Now that's as invisible as the hand of the free market can get.  Don't like being gouged in bad weather by Uber? The author of the CNN Money piece says 'get over it'.

Uber has a dynamic pricing model, in which fares rise when demand for cars is higher. That encourages more cabs to get on the road -- few chauffeurs want to drive around the city in the middle of a blizzard, but a guarantee of a $200-per-ride fare might be incentive enough to change their minds.
 
It also ensures that users don't have to wait around for hours for an Uber cab, which would defeat the purpose of the luxury service. If you're willing to pay $350 to go from Midtown to Brooklyn, there will be a cab at your location when you want it.

[...]

"Nobody is required to take an Uber, but having a reliable option is what we're shooting for," Uber CEO Travis Kalanick blogged last year. "It's not about gouging."

It doesn't matter how rich you are; nobody wants to pay $200 for a cab ride. But the wonderful thing about a free market is there's always another option. You can still travel 25 miles from Yankee Stadium to Rockaway Beach for just $2.50 if you take the subway.

Everything is now a commodity. The Bloomberg writer suggests a more, shall we call it, existential rationale.

Whether or not this is outrageous isn’t a question of economics. It’s a question of values. The ethical discussion can get a bit Talmudic. For some things, like the price of publicly traded stocks, society has decided to strive for as close to a perfect market as possible. For others, market forces are interrupted in one way or another. Restaurants, concert venues, and movie theaters all accept less than full market value for their goods and services at times of high demand, because they think it’s good business. At other times, the government sees a social good in dulling market forces through regulation or subsidies.

Kalanick, on the other hand, is a free-market fundamentalist. This isn’t surprising: Rationality has long been the religion of Silicon Valley, and what’s more rational than having a computer constantly calibrating prices? But a free market is always defined by scarcity: Not everyone who wants something can have it. So even if Uber is facilitating more rides, building a system where there is what amounts to continuous bidding for services will aggravate inequality.

[...]

Uber’s approach is effectively the opposite of the existing car-service industry’s model, where prices are largely regulated. Then, when it rains or snows, people manage to get rides mostly by being lucky. Uber’s riders can trump luck by being wealthy. Which one is unfair?

John Aravosis at AMERICAblog recently wrote a glowing advertorial about his maiden voyage on Uber.  He used his space not only to praise the service -- no problem there -- but to help himself get a few $10 credits.  Sorry John, but that's unethical too.

I think anybody who uses this service has to steel themselves for the eventuality that they are going to get ripped off, and sooner rather than later.  So have it, lemmings. It's all yours.  I'll stick to the folks that provide actual local jobs, give back to the community, are just as reliable and dependable without the predatory capitalistic supply/demand price gouging, and play by the rules that were established decades ago to weed out unscrupulous businesses (like Uber).

Update: More from Gawker, and a Los Angeles victim, in The $357 Uber Ride.

The Daily Stockman

I get the feeling it's going to be a daily series, anyway.

A Texas SuperPAC with close ties to Sen. John Cornyn is launching a “Shady Stockman” social media campaign to spotlight ethical questions dogging Rep. Steve Stockman, the senator’s top rival in the March primary.

The political action committee, Texans for a Conservative Majority, has plenty of funds to bolster Cornyn, thanks to a $2 million donation last spring from Houston home builder Bob Perry.

You know, I might start to feel sorry for Steve if this keeps up.

A Twitter handle, @shadystockman, has only one follower so far. The website and Facebook pages are also in the early stages. But there’s enough to get the gist of the attacks on the Friendswood Republican ...

Under the heading “Finances,” the site refers to a recent Houston Chronicle investigation that found Stockman had failed to sufficiently explain the source of $350,000 in income over the last two years. Under “Ethics,” it notes his failure to file required congressional disclosure forms, and a scandal involving illegal donations that prompted him to fire two aides.

Under “Criminal history,” it notes that Stockman had been jailed repeatedly and was even caught once by jailers with Valium in his underwear – an admission he made to Texas Monthly in a 1996 profile, explaining the hell-raising days of his youth, before he found Jesus and conservative activism.

Website visitors can spread the message at the click of a mouse, tweeting out such taunts as “@StockmanSenate can try to run for Senate, but he can’t run away from his past. See more at: http://www.shadystockman.com/#sthash.FIj2ji6O.dpuf

Sorry, but I'm not going to do any more than what I just did in order to help John Cornyn get re-elected.  I wonder how the Tea People feel about Big John brutalizing their boy like this?

-- Under the headline "Tea party candidate selling Obama ‘barf bags’":

Texas Republican Senate candidate Steve Stockman has nowhere near the millions of dollars his GOP opponent Sen. John Cornyn has, but the tea party congressman has a novel fundraising ploy: selling Obama “barf bags.”

Stockman unveiled the bags Tuesday on his website alongside a letter that touts the candidate as a “proud, principled conservative Tea Party Republican” who has spent “the last few years defeating liberals by helping train and launch the Tea Party.”

Every $10 donation comes with one bag printed with an image of the president and a tagline that reads, “Socialism Makes Me SICK!”

“If I win this race, you and I will be able to spend decades repealing Obama’s radical bills, unseating Obama’s radical appointees and ripping out Obama’s radical regulations,” Stockman writes in his campaign letter. “Obama’s socialism is too dangerous to send timid backstabbers to the Senate.”

Supplies are limited!  Get 'em while they're hot!  Puke your guts out!

Now puke some more!  You've only got about three months to get it all out of your system.

Update: You might need a barf bag for this.

Those looking for dirt on Rep. Steve Stockman (R-TX) need look no further. TPM has obtained photographs taken by the local officials who recently shut down Stockman's campaign office in Webster, Texas. And the images are dirty. And dusty. And grimy.

The story, to recap, was reported last month by The Houston Chronicle. According to the Chronicle, officials in Webster, Texas in November ordered the emergency closure of Stockman's campaign headquarters, citing multiple safety violations. The newspaper reported that various campaign staffers and volunteers were working and sleeping in the office, located in a former a former motorcycle shop considered unsafe for habitation.