I seem to remember Uber’s tilt to profitability coinciding with a move to extend their “dynamic pricing” to a driver-side reverse auction for fares, which they called “Trip Radar.”
Mysteriously I’m having trouble finding much reference to it now, although I remember it being discussed at the time… the only real discussion I can find now is recent and vaguely agenda-flavored [0]. Complete with extra-weaselly non-denial denials from Uber’s PR.
> In 2024, American media non-profit More Perfect Union conducted an experiment to discover whether Uber’s algorithms facilitate wage discrimination. It gathered seven experienced Uber drivers together in a high-traffic area in Los Angeles and asked each of them to open up the app and place their phones on a table next to each other. It found that Uber offered the same rides 46 times to multiple drivers, and that there was discrepancy between fares for 63% of those trips. Uber refuted that this was discrimination, saying in a blog post that differing pay was due to GPS discrepancies.
So the drivers bid each other down, while the riders bid each other up through “surge pricing” (even as they’re individually priced according to their willingness to pay). Nice market position if you can get it…
It’s a good party trick if they’ve clocked you, like they apparently have me, as a total cheapskate. As a rider I routinely see prices 50%-70% of those Uber offers to my richer and less price-sensitive friends when we call for the exact same ride from the same place at the same time, whether I call first or second…
They are a natural monopoly. All network-based marketplaces with barriers to entry are.
That competitors exist does not make them not a natural monopoly. Even the fact that the are not a current monopoly does not mean they are not a natural monopoly: https://en.wikipedia.org/wiki/Natural_monopoly
The first 6 worlds in your cite are "a natural monopoly is a monopoly...". That competitors exist mean they're not a monopoly and therefore can't be a natural monopoly.
>Specifically, an industry is a natural monopoly if the total cost of one firm, producing the total output, is lower than the total cost of two or more firms producing the entire production.
The industry of operating a network connecting independent taxi service providers to taxi service clients is the natural monopoly, simple because the cost to operate the service is wildly scalable, and become more useful as more people use them, as all network-based industries are.
Mysteriously I’m having trouble finding much reference to it now, although I remember it being discussed at the time… the only real discussion I can find now is recent and vaguely agenda-flavored [0]. Complete with extra-weaselly non-denial denials from Uber’s PR.
> In 2024, American media non-profit More Perfect Union conducted an experiment to discover whether Uber’s algorithms facilitate wage discrimination. It gathered seven experienced Uber drivers together in a high-traffic area in Los Angeles and asked each of them to open up the app and place their phones on a table next to each other. It found that Uber offered the same rides 46 times to multiple drivers, and that there was discrepancy between fares for 63% of those trips. Uber refuted that this was discrimination, saying in a blog post that differing pay was due to GPS discrepancies.
So the drivers bid each other down, while the riders bid each other up through “surge pricing” (even as they’re individually priced according to their willingness to pay). Nice market position if you can get it…
It’s a good party trick if they’ve clocked you, like they apparently have me, as a total cheapskate. As a rider I routinely see prices 50%-70% of those Uber offers to my richer and less price-sensitive friends when we call for the exact same ride from the same place at the same time, whether I call first or second…
[0] https://novaramedia.com/2025/03/06/taken-for-a-ride-inside-u...