Lyft, Uber drivers boost app surge prices by turning off, tuning out – and cashing in

Drivers for ride-hailing apps Lyft and Uber have organized for better pay through collective action – and not by unionizing. Here's how it works: a group of drivers who pick up passengers at Ronald Reagan Washington National Airport, outside the US capital, have been turning off their taxi apps simultaneously to influence the …

[David Pearce]

In Singapore drivers for the regional player Grab, have taken to using GPS spoofing to allow a driver actually far from the pickup to take the job and using a hacked version of the driver app, that allows the driver to cancel a pickup that they don't want without penalty

[Blockchain commentard]

Surely if 100-150 drivers all log in, the price should then surge downwards as quickly as it rose. Or is Uber acting like oil companies, quick to put prices up, tardy in price reduction. And we all love oil companies for that kind of behaviour.

[Anonymous Coward]

I always like when supply/demand 'law' should work only in the ways it advantages companies, never the other way round....

[Anonymous Coward]

I think what is actually happening is that the drivers turn off and get the price to rise, but people are at the airport and need a ride and agree to surge pricing. Then the drivers can turn back on and grab one of those already agreed to higher priced rides.

This is a perfect strategy for an airport since you know people will be there and are stuck so they are willing to pay extra for a ride (especially if they are on expenses so it isn't their money)

Which is why most cities instituted a standard fare to/from the airport for taxis eons ago...maybe Uber and Lyft will catch on to that, eventually.

[Pascal Monett]

Eventually, after a lawsuit or two.

[TRT]

50 drivers waiting with apps off, the first two in the rank are "allowed" to turn their apps on. So it only ever looks like there are two drivers available to handle the 50 plus requests in that area.

[GruntyMcPugh]

@DougS "people are at the airport and need a ride and agree to surge pricing"

There was a section on a consumer affairs type TV program recently, where car hire companies deliberately gouge tired travellers at airports when they try to get a rental, by adding on insurance, waivers, etc.

Seems everyone is joining in.

[Tigra 07]

RE: Blockchain

The user has to agree to the surge pricing before the app finds them a willing driver. After that, even if millions of drivers become available the user won't know. They've already agreed to pay more.

The alternative is to find alternative transport, or keep checking the app to see if the surge pricing is increasing or decreasing (which for me has sometimes taken around 10 minutes to become reasonable again)

[Anonymous Coward]

How dare the "independent contractors" cooperate - they are subverting the natural law that The Company manipulates the drivers, not the other way around. The drivers should just take whatever scraps the algorithm gives them.

I mean, this is the thin edge of the wedge! Unions, socialism, Venezuela!

[Jediben]

An environment ripe for a new player imo.

[John Brown (no body)]

I hope you are not suggesting a ......disruptive!.....new player. Oh the horror, oh the humanity.

[deadlockvictim]

Article: Uber did not immediately respond. Lyft said attempted manipulation represents grounds for banning drivers from its platform.

It is we who cream off the profits from your hard work. It is COMMUNISM!!!!!!!!! (to channel Bombastic Bob) when the little people work together and benefit from their betters.

Remember the Trickle-Down-Effect. You will all be rewarded in the end. Sometime. In the future.

[BebopWeBop]

In another life. I believe that 70 virgins are involved as well.

[HunterofSnarks]

Given that lyft/Uber take a percentage of the fare regardless, increased surge pricing means more revenue to booking parasites. Don't expect them to be in a hurry to stop it.

[e^iπ+1=0]

This!

Uber / Lyft _profit_ from surge pricing. Only the customer loses.

There is no incentive for them to kick drivers who do this out, other than as a gesture of good faith towards the customer.

[katrinab]

If Über works out more expensive than the local competitors, people will go there, or if the premium over public transit gets too high, people will take the bus / train, and then maybe a taxi for the final leg of the journey.

[Anonymous Coward]

Regulated pricing

and they wonder why old school taxis have regulated prices, to stop this sort of thing. Uber is nothing more than a cheating taxi firm, it will be regulated very soon.

[Wayland]

Re: Regulated pricing

Exactly. It was touted as amazing new technology but really it was just avoiding the regulations that make normal taxis both safe and expensive.

[sabroni]

Independent contractors

can charge what they like. Workers do what they're told.

Which one do Uber want their drivers to be?

[Rameses Niblick the Third Kerplunk Kerplunk Whoops Where's My Thribble?]

Fraud

"Lyft takes any allegations of fraudulent behavior very seriously as it violates our community guidelines and can lead to deactivation from the Lyft platform," a company spokesperson said in a statement emailed to The Register.

It may be manipulating the system, it may be against their community guidelines, but I think they may struggle to convince a jury that an independent contractor "fraudulently" logged out of their app. A quick Google search defines fraud as "wrongful or criminal deception intended to result in financial or personal gain." Now the second part definitely applies, there is certainly financial gain involved, however are they going to say it's wrong for drivers to log out of their app?

Hang on, I forgot, we are talking about Corporate America, they can do and say more or less what they want. As you were.

[Jim Mitchell]

Re: Fraud

In the US at least, this kind of "organization" between suppliers, which the drivers are, is an antitrust violation. Uber can fix the price, but the drivers can't, sorry. At least according to https://jalopnik.com/the-legal-argument-that-could-destroy-uber-1834790506

[Craig 2]

Re: Fraud

"I think they may struggle to convince a jury that an independent contractor "fraudulently" logged out of their app"

No opinion on the rights or wrongs with the whole "gig economy" situation but:

If they are sat in the airport taxi rank and turn the app off, wait 5 mins then turn it on and immediately collect a fare that's easily traceable evidence. If they do that regularly, coinciding with a group of other drivers then it's even easier to prove fraudulent behaviour. As you say, not criminal but could soon get them banned from the system.

[Anonymous Coward]

Re: Fraud

This has been happening for a while, and it is pretty easy to show intent when, as happened in California recently, they were all co-coordinating on twitter.

What isn't clear is if any of the local prosecutors or courts are interested in pursuing charges against drivers. At the end of the day the injured party is the passenger, as Lyft and Uber both get a slice of the increased take when the drivers collude to push up costs.

A better solution would be to let the drivers offer their bid price for the ride, and let the passengers make the choice from the price of ride and ETA of pickup. You know since the drivers are independent contractors and not employees right?

[Dal90]

Re: Fraud

>If they are sat in the airport taxi rank and turn the app off, wait 5 mins then turn it on and immediately collect a fare that's easily traceable evidence.

I go to an auction.

I don't like the prices, I don't raise my paddle.

I like the prices, I raise my paddle.

Yep, it's evidence the price hasn't aligned with the market alright.

Don't want prices to fluctuate with market demand? Regulate it. You know, like the taxi industry you deny that you're a part of.

[JohnFen]

Re: Fraud

If the drivers are intentionally doing things prohibited by their contract, and are attempting to hide that activity, then that's clearly fraud.

[John Brown (no body)]

Re: Fraud

In what way are they doing something that breaks the terms of their contract? Does the contract force them to stay logged in? Does it disallow them from communicating with other drivers? I'd be very surprised if there was anything in the contract even alluding to this practice since the companies, at least until now, have been denying it exists.

[JohnFen]

Re: Fraud

I'm not asserting that they are -- I have no way of knowing one way or another. I was just stating how it's possible that fraud, in the legal sense, could be in play here.

[katrinab]

Re: Fraud

Such a term in their contract could make them not an independent contractor.

[veti]

Re: Fraud

They don't have to convince a jury. I'm pretty sure Lyft can boot a driver without dragging it through any courts.

[Anonymous Coward]

the taxi apps' surge pricing algorithms kick in

MAN v. THE MACHINE... MAN WINS! [ok, ok, DRIVERS win, f... political correctness!)

btw, I'm sure I've already read this story, and quite some time ago, but elsewhere, so no win here!

[Anonymous Coward]

Re: ok, ok, DRIVERS win, f... accuracy!

Fixed it for you!

[Daniel Hall]

FACTS!

So,

14,000,000,000 divided by 1,400,000 equals 10,000

Please, I am sick of hearing how such and such company has paid out such and such total money to its workforce/contractors as a whole etc etc without telling us how many there are to divide the payout by.

Can we start having ALL the facts from now on?

According to Google Lyft has 1.4m drivers. Averaged out that suggests $10,000 each earnings. Which means absolutely sod all.

[tin 2]

Re: FACTS!

Agree. Completely meaningless stat.

[DCFusor]

Re: FACTS!

Are you just now figuring out that EVERY STAT you see, everywhere, has been "click-baited" since before clicks?

I guess you learn it early as an EE. If some spec is not on the data sheet, that's where that component sucks. Always. If it's an opamp and no noise spec, it's noisy. If no drift spec, it drifts. And on and on - different omissions for different types of parts, but that's just part of knowing how to be good at your job.

After awhile you notice "the dog that didn't bark" just about continuously, from almost every source. It makes one ashamed to be homo sapiens sometimes.

[Tigra 07]

An Uber driver told me about this in Birmingham over a year ago. The problem is widespread and has been going on without Uber giving a shit.

[Charlie Clark]

Seeing as Uber gets % of the price, it likes "surge" pricing. As DougS notes above this kind of "captive market" problem is why taxis are regulated in many places.

[Pen-y-gors]

Neat

see subject

[juice]

Here in the UK

I've had a few drivers cancel on me while en route. Mysteriously, when I tried to flag up another one, it turned out that we'd just hit a surge period...

I'm assuming Uber has a mechanism to flag up to drivers that a surge period has started, but at the same time, I would have expected Uber to build in a mechanism to monitor for abuses of this mechanism. Something as simple as "if the driver is on a job, don't alert about surges until they've finished" would help.

OTOH, you can't stop word-of-mouth, and there's no doubt a third-party app to facilitate that.

More recently, I've also had the experience of a driver attempting to bill me for a failed pickup. Which was all the more amusing, as thanks to Uber, I'd just spent the last 5 minutes watching him drive in circles; he clearly wasn't a local driver and had gotten highly confused by the local combination of road works and one-way streets.

Needless to say, I challenged this and Uber refunded the charge, but it does make me wonder if that's another "alternative" revenue source for some drivers. Literally, money for nothing...

[sketharaman]

Alternative Revenue Source for Uber

I keep having this experience. Back in the day, when the driver canceled, rider wasn't fined (I've heard that driver was fined). Whereas, nowadays, I, as rider, get fined even if driver cancels. What I think is happening behind the scenes is, Uber fines driver and rider when driver cancels. Rider can get a refund but only after claiming it on the app. Not many people would be willing to jump thru' so many hoops for a fairly small amount, so Uber gets to pocket the amount. I'm reasonably sure this Rider fine is an "alternative" source for Uber, not driver. Saddens me to find out that the poster child of startups, creator of new gig economy, and $80B company has to resort to nickel-and-diming, just like streetside handyman.

[Fred Flintstone]

Re: Alternative Revenue Source for Uber

Lots of nickels and dimes also make a fortune..

[vtcodger]

Re: Alternative Revenue Source for Uber

Last quarter reported by Uber (Q4 2018), Uber reported losses of $865M. Seems an odd way to make a fortune. But what do I know?

[Anonymous Coward]

Re: Alternative Revenue Source for Uber

Last quarter reported by Uber

I can believe they're in trouble if they only reported $0.25..

:)

[JohnFen]

Re: Here in the UK

I had a similar experience with a real cab company in the US a couple of weeks ago -- I watched the cab driving around trying to find me before giving up and driving off. Fortunately, since this was an actual cab company, not only did I not get any sort of fine but when I called them up to complain, they were very apologetic and had another cab to me in less than 10 minutes. Mistakes happen, and how companies handle those mistakes means everything.

[JohnFen]

Good decisions

I don't use Uber because they're a vile and criminal company who I am unwilling to support in any way. I have no problems with Lyft, but just never got into the ride-sharing thing except very occasionally. Given that this sort of behavior happens, I think I've made good decisions on both counts.

[andrewj]

Too bad someone hasn't come up with an app that cuts the middleman (Uber/Lyft) out of the whole transaction

[Anonymous Coward]

They have...

Here in Austin there's a non-profit called RideAustin that takes a very small cut (~$1.00) for each ride and the driver gets the rest. It's a great service - the only one allowed to stay in Austin a few years ago when Uber and Lyft got the boot for not agreeing to fingerprint and vet their drivers better - something RideAustin has done from the beginning. I use them exclusively when in town - the drivers love you for it as most drive for all thee companies and make a lot more on RideAustin fares. I desperately wish this model would spread to other cities.

[Anonymous Coward]

Re: a non-profit called RideAustin

This is what this technology was supposed to be! To be genuinely disruptive it has to remove the middle man.

Instead we've just got digital work houses.

[SteveMcG]

I think you'll find they have. It's called sticking your hand out and hailing a taxi ;-)

[DontFeedTheTrolls]

Pretty sure Hackney Carriages in London did this from the 17th Century right up to 1907. "Raining Guv'ner, that'll be double the price"

So the City Of London introduced regulations, taxi meters and fixed fare tables.

"Yeah, we're not a Taxi company, we're on the side of the consumer against these nasty taxi companies, we don't need to comply with the pricing regulations, supply and demand"

[Ian Michael Gumby]

Meh.

Uber / Lyft need to apply a PID algo which will take in to effect these sudden surges.

And of course they can politely remind drivers that if they partake in any similar action they will be suspended as a driver for a period of time.

Think about that for a second. Uber/Lyft know when drivers sign in and out of the app. They can spot regional 'outages' and will know which drivers participated in said effort.

Of course Uber/Lyft make more money if the drivers do game the system. So no incentive for them to do it.

[Anonymous Coward]

Your rules can be gamed

Don't care what rules you put in place, they can be gamed. If 150 people leave the app over a period of minutes, well are all 150 in on the "scam" or are there a few that truly left because of some other reason? So the innocent are blasted with the guilty, sorry about the collateral damage.

Maybe make it 5 times and you are out? Works a little better, till the drivers figure that out, and be sure they are only 4 of 5.

Or maybe the drivers want some bad pr for Uber... so they pick out some poor person struggling to support orphans... make sure that someone gets on the 5 of 5 list... hard, but not impossible. Then call the local papers and hope that the deliberate collateral damage goes viral.

The best one can hope for is to keep the scam behavior to tolerable levels, since it can't be eliminated cost effectively, at least until there are robot cars or mind police.

[JohnFen]

Re: Your rules can be gamed

They could just stop with the "surge pricing" nonsense. That would make it impossible to game.

[Anonymous Coward]

In other news...

...bears shit in woods, Pope still Catholic etc.

[Ken Moorhouse]

Could this be classified as...

a Cartel?

(It would be interesting to see who wins the battle of Artificial Intelligence vs Intelligent Artfulness).

[Anonymous Coward]

Ride sharing

Can get on the sea

[Anonymous Coward]

Considering Uber seems happy with having war criminals in the US and rapists in London as drivers I think a surge pricing scam is the least of customers' worries.

[what-where-when]

Why do the media keep perpetuating the "ride sharing" myth. They are TAXI companies pure and simple. There is no ride sharing involved