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Comment by madeofpalk | Hacker News Reader

I don't see this as a twist - it appears surge pricing is working exactly as planned. When resources are scarce, it limits demand and ensure that there are drivers available for those who really need it (who will pay).

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To elaborate on https://news.ycombinator.com/item?id=10477319:

Uber advertises surge pricing as a strategy to incentivize^H^H^H^H^H^H^H^H encourage drivers to become available in areas with high demand.

But if the study's results reflect reality, the surge pricing does not encourage drivers to go to high-traffic areas, it simply drives demand down until it is aligned with the supply of drivers in the area. Driving demand down also discourages drivers from working the area, and thus some actually leave, lowering supply further.

Is that bad? It depends on how you feel about companies being honest with customers. A more accurate message on the app might be "Demand is through the roof, but there are only enough cars for those who need a ride so much that they are willing pay 1.5x the normal rate. Hurry before there are even fewer cars and the surge price raises to 2x."

Likewise, if you feel companies should be honest with their subcontractors, the message for drivers ought to be "Demand in this area is through the roof, and the lucky few who will get riders before we drive demand down, will earn 2x the normal rate. The rest might not get any riders at all, as riders make other plans or flee the area."

According to the article, they are working on tools to help drivers with the latter proposition, but not the former.

I'm curious about what you are communicating with the incentivize/encourage split. I presume from the presentation that you found it meaningful. Given that your entire comment can be summed up as encouraging connotation management, I'm wondering what you see in that word pair.

Oh, it was a sidelong comment on the use of business jargon like “incentivize,” when a perfectly good word like “encourage” already exists.

That's not greater honesty, but simply a natural inference from the available information[1], and one that everyone makes in any supply/demand pricing system. Although it's always a crap shoot whether you'll be able to get new supply to market before others like you bid the price down.

If you consider the price changes "dishonest", how do you feel about every other price change in the market? The problem with arguments against surge pricing is that they almost always become fully-general counterarguments against the very concept of a pricing system.

[1] If I said "not-A OR B", would you say, "It would be more honest to say 'A implies B'"?

If we’re having a nerd debate about logic, we both know that many different was of phrasing the same thing are equivalent. But the reason there are copywriters and focus groups and A/B testing and the entire apparatus of marketing is that how you say it has a very real effect on the inferences people draw and the way they behave.

Right, but you're talking about the phrasing of a basic, well-known, ubiquitous dynamic that people deal with all the time. By your standard, it would seem to be likewise dishonest for any store to raise or lower any price without attaching an economics lesson.

Wrong: "Apples are 10% off this week."

Right: "Apples are 10% off this week, indicating that suppliers are generally willing to offer lower prices for apples now and in the near future, so they should redirect near-term production away from bringing them to market, and consumers should look for marginal uses that they can substitute apples into, like snacks or pies."

That's pretty much unexpected anywhere else.

The story is about drivers wo drive out of a surge pricing area, not about customers ("who will pay").

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