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Comment by gigatexal | Hacker News Reader

Lol @ predatory pricing. Surge pricing works in the same way that efficient markets do. When the road conditions are crazy and there's an imbalance in the number of drivers and the number of riders seeking drivers the price shoots up. The higher prices incentivize drivers to take the risk for the reward (compensation). This is simple economics.

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You didn't even read the article. The predatory pricing they're talking about is running competition out of business by selling below cost until they have a monopoly.

Uber breaks even in the US. No predatory pricing there.

Kroger is doing this too. To stay relevant and increase marketshare they're selling organic produce at a loss. Let's villify them too.

Yes, let's! Dumping to undermine competitors is one of the oldest tricks in the book, and it's always dirty - there's no way the company is going to sustain such prices long term, and they'll want to recoup losses, so once competitors are driven out, the prices inevitably end up being higher than what those competitors offered before.

While road conditions are probably correlated with surge it's really more closely tied to the effect bad weather has on someone's willingness to walk (often to distant public transport). It turns out that when it's raining or very cold a lot more people choose to take a car. It's not about risk/reward it's about supply/demand. When supply (drivers) is low relative to demand (riders) higher prices will incentivize more drivers to go online and thus fix the scarcity of drivers.

You're missing what they mean by "predatory pricing." They're complaining about low prices due to Uber subsidies.

https://en.m.wikipedia.org/wiki/Predatory_pricing

Since it is simple economics then you might know about the 'helicopter money' principle. In Uber's case they artificially are able to create a market by undercutting prices where (as the article states) even public transportation can not compete anymore with the endgame of having a monopoly. If Uber would not have billion's of VC's helicopter money they would not be able to do that.

Yes, please keep repeating this to us as though we're idiots who have never heard of supply and demand, and as though we haven't heard this explanation from Uber defenders a thousand times before. And definitely don't consider the possibility that we understand this reasoning and still find it unsatisfactory.

Snark is deprecated here, so please don't do this. Instead, if a comment is annoyingly missing something important, wait for the annoyance to subside, then neutrally say what they're missing. Otherwise the discussion just degenerates.

If you don't say why you find this argument unsatisfactory then we'll be compelled to assume that you just don't understand supply and demand, just like SF NIMBYs.

You can't know how surge pricing actually works, because Uber's algorithm is proprietary. It could work in theory but not work in practice - people usually report they can beat surges by walking a block or switching to Lyft, and maybe drivers don't care about a 1.2x price surge or can't hear about it in time?

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