Follow Slashdot stories on Twitter

 



Forgot your password?
typodupeerror
Patents Businesses The Almighty Buck

Uber Pushing For Patent On Surge Pricing 190

mpicpp sends news that Uber is renewing its push for a patent on "surge pricing," the practice of increasing rider fees when many people are trying to find transportation. The system measures supply (Uber drivers) and demand (passengers hailing rides with smartphones), and prices fares accordingly. It’s one of at least 13 U.S. patent applications filed by Uber or its founders to give it an edge over potential rivals ahead of a potential initial public offering. So far, Uber hasn’t had any luck. Ten applications were initially rejected by the U.S. Patent and Trademark Office for “obviousness” or for covering something not eligible for protection.
This discussion has been archived. No new comments can be posted.

Uber Pushing For Patent On Surge Pricing

Comments Filter:
  • not original (Score:5, Insightful)

    by bloodhawk ( 813939 ) on Monday December 22, 2014 @08:05PM (#48656501)

    Surge pricing I would have thought falls under the obvious category. It is simply pricing for supply and demand. higher prices bring in more suppliers and reduce the buyers. most businesses don't do it because it is difficult to manage and can cause a lot of customer aggro not because they are not aware of the supply and demand models.

    • by houstonbofh ( 602064 ) on Monday December 22, 2014 @08:25PM (#48656607)
      Ticket scalpers will sell you prior art for $100 over face value.
      • by Matheus ( 586080 )

        *THIS* ^^^^

        I've rarely experienced supply and demand so exquisitely demonstrated than when purchasing (or selling) concert tickets. Variable demand spikes depending on the quality of the merchandise (how 'big' is the band); Prices change constantly; inventory moves in and out of the market; Complex timeline price variations starting from pre-sale through on-sale and over the time between release and showtime (somewhat but not always predictable rises and falls over that time). It's a full time job keeping u

    • And when demand shrinks, the customers you had before won't be yours any more. I once worked for a cab company. When their only competition in town went out of business, they jacked up their rates for medical/blood deliveries. When the other company made a comeback, the doctors and hospitals switched over to the competitor. Moral of the story: gouging customers only works in the short term.

      • I once worked for a cab company. When their only competition in town went out of business, they jacked up their rates for medical/blood deliveries.

        Goodness, taxi drivers are assholes. I'm glad they're going out.

    • Toll roads already use surge pricing in some places, to keep the toll lanes uncongested during times of high demand. Uber's patent is so similar as to be obvious.

      • by rtb61 ( 674572 )

        Actually it is normally called price gouging or profiteering http://en.wikipedia.org/wiki/P... [wikipedia.org] and is normally considered illegal in most modern democracies, which is the reason why it likely will not be patentable, although based upon past behaviour by the USPTO it will likely pass as long as the device it happens on, has rounded corners. This style of continuous price adjustment targeted against individuals is likely to result in some new regulations, especially with regard to disclosure or deceit with r

        • Re: not original (Score:4, Insightful)

          by bill_mcgonigle ( 4333 ) * on Tuesday December 23, 2014 @01:50AM (#48658061) Homepage Journal

          Price "gouging" is a good thing. It sends information signals to the market to divert goods to where they are needed. Hurricane approaching Florida? That load of plywood headed to Michigan should be diverted to boarding up windows in Dade County instead of to building a dog house in Lansing. But if the price of plywood is kept artificially low (only possible by the guns of government), there's no incentive to send the truck towards a hurricane, so the Michigan contract is fulfilled.
          During Hurricane Sandy some friends and I looked at renting a truck and getting some generators from our local stores to NJ - about 300 miles. It would obviously have to be worth our effort but both we and the people without power who could not find generators would benefit. But then Chris Christie got on TV threatening anybody who would charge above big-box store non-emergency prices with National Guard action. "Screw that", we said, "they can sit in the dark and enjoy their fairness".
          The important information theory piece to learn is that prices are the information signals that are sent through markets. The important economic piece to learn is that scarcity is real. The important political piece to learn is that politicians ignore both, to the detriment of their people but to their own personal gain.

          • Re: not original (Score:5, Insightful)

            by rtb61 ( 674572 ) on Tuesday December 23, 2014 @02:34AM (#48658211) Homepage

            I hope one day you find yourself hanging from a cliff and just before the person reaches down to help you they say, agree to hand over all your assets or I will divert my resources to else where and assure you, that you can always wait for a more competitive offer. Perhaps a fire brigade that agrees to buy your house for 50% of it's value or they will not put out the fire. Price gouging practices inevitably leads to people creating disasters in order to exploit them. Creating monopolies are the same idea. So no, your ideas suck and they are grossly anti-social and have no place in a modern society.

            • by N1AK ( 864906 )

              I hope one day you find yourself hanging from a cliff and just before the person reaches down to help you they say, agree to hand over all your assets or I will divert my resources to else where and assure you,

              I hope one day you're dying of thirst somewhere, and no clean water is coming because charitable groups can't mobilise fast enough and anti-price gouging laws make it uneconomical for private enterprises to sell where you are.

              Your fire brigade example is especially ignorant. If you aren't in an ar

              • by skegg ( 666571 )

                I suspect the answer lies somewhere in between.

                What about India -- under threat of allowing foreign drugs to be replicated without paying patents [forbes.com] -- slashing the price they'll pay for said pharmaceuticals?
                Surely this is an example of the market not working? (The final price is not the result of supply intersecting demand.)

                Of course, it's very important that the pharmaceutical companies remain profitable so they can continue their R&D.
                Though ... I don't think there's any imminent cause for concern [bbc.com]

              • by rtb61 ( 674572 )

                That fire brigade idea is a historical fact, it occurred in Roman times. In fact that fire brigade was suspected of starting some of the fires. http://en.wikipedia.org/wiki/H... [wikipedia.org] Now don't you feel foolish ;D.

                • don't we just call it protection money these days?

                  We're so enterprising, the disaster is theoretical and on a personal level.

                  You want hands? i'll off the service of keeping this hammer from breaking them for half your life savings and profit.

                • If your finger hadn't got tired, you might have read the bit that says "... where the actions taken to create the disaster wouldn't be a crime anyway".

                  Not an expert on Roman law, but I suspect arson was somewhat frowned on then as it is now.

              • A fire brigade is much like insurance, in that it alleviates large but rare losses. For that to work, it's necessary for people to contribute to the fire brigade, with taxes or service fees, while not expecting to need them. People who don't contribute aren't in the insurance pool, and therefore it's reasonable to charge them the whole cost (including marginal costs and amortization of fixed costs), which is high because fire brigades aren't cheap. It has nothing to do with surge pricing.

                One thing abou

            • I hope one day you find yourself hanging from a cliff and just before the person reaches down to help you they say, agree to hand over all your assets or I will divert my resources to else where and assure you, that you can always wait for a more competitive offer.

              We're talking about people who willfully build and rebuild homes that cannot take the stress of recurring natural disasters in a place where those disasters occur not merely occasionally, but regularly. And, I might add, in your example we have people who willfully build and rebuild flammable homes in areas known for their wildfires. That should be illegal and prohibited by code but instead it is enshrined in law.

              Perhaps a fire brigade that agrees to buy your house for 50% of it's value or they will not put out the fire.

              That is wildly different from the given scenario, and your bringing it up here is pure prevaric

              • If you were talking about Florida, Louisiana, and that area, sure, makes perfect sense to blame them when another storm hits. New Jersey doesn't exactly get that many storms. Living in Maryland, I can remember three hurricanes, one went right up the Chesapeake and pushed a 12 foot storm surge up the bay, it flooded the whole inner harbor. This is not normal, the other two hurricanes just dropped a lot of rain.

                Areas to the north don't get slammed by hurricanes so often, so codifying hurricane proof housin

          • by sinij ( 911942 )
            No, price gouging is a failure of elasticity of demand. For the market to function properly, both parties to transaction must be rational and able to walk away from the deal. In most cases of gouging, one party has another 'over the barrel'. Such scenarios could not be properly described with market theory, but I theorize criminal law would be much more appropriate tool.
        • by N1AK ( 864906 )

          Actually it is normally called price gouging or profiteering http://en.wikipedia.org/wiki/P [wikipedia.org]... [wikipedia.org] and is normally considered illegal in most modern democracies

          No it isn't. Price gouging laws almost universally are limited to disasters and to critical items. Even if you consider taxis critical the vast majority of surge pricing on Uber is for things like sporting events, rush hours etc not hurricanes.

          If you have 100 taxis, and 1,000 people want one then what is the correct way to decide who g

    • by vux984 ( 928602 )

      I would have thought falls under the obvious category.

      You don't seem to realize what the "obvious" category is. It's not for the idea, its for the implementation.

      It is simply pricing for supply and demand. higher prices bring in more suppliers and reduce the buyers.

      Yes, but how to you measure supply and demand? How do you set prices? Those are the details that define the patent.

      Otherwise I could patent a cure for cancer. Its pretty obvious really and I'm not sure why it hasn't been done already. It simpl

      • by N1AK ( 864906 )

        Yes, but how to you measure supply and demand? How do you set prices? Those are the details that define the patent.

        I'd be interested to hear of a method for measuring supply (number of drivers) and demand (number of potential customers) that wouldn't be considered obvious. It is after all one of the most basic areas of economics. Setting prices will be an algorithm and they aren't eligible for patenting in a lot of countries and difficult to protect in others. Remember that patents aren't for things that ar

        • by vux984 ( 928602 )

          I'd be interested to hear of a method for measuring supply (number of drivers) and demand (number of potential customers) that wouldn't be considered obvious. It is after all one of the most basic areas of economics.

          And wiping windows is one the most basic areas of home maintenance, but if you come up with a wiper design that gets a cleaner window with less streaking its still patentable. Even if "using a better wiper to wipe the window" is obvious.

          Setting prices will be an algorithm and they aren't eligibl

    • Indeed. Apparently Uber hasn't heard of the stock market.

    • Bus and taxi drivers in most deverloping countries have been doing this for over 40 years to my personal knowledge, and probably since transport began.

      Captain Obvious used to own the patent until it expired.

  • by Harlequin80 ( 1671040 ) on Monday December 22, 2014 @08:07PM (#48656517)

    They could patent surge pricing during terrorist or hostage activities.

    Uber managed to get some bad press here in Australia when their price went up to $100 for a callout to get out of Sydney when the guy took hostages in the Lindt Cafe there.

    • Re: (Score:2, Informative)

      by Anonymous Coward

      Also known as price gouging [wikipedia.org]
      Illegal in most US states -- probably most other industrialized nations.

      Wow, and they're trying to patent it? What a slimeball company.

      • Welcome to the New (AKA Crony) Capitalism. Price gouging and monopolistic practices used to be illegal. Now not only are they just good business sense, but in some cases patentable. But at least you know when you are being gouged that it is going to support a good cause (the free market).
    • by rockout ( 1039072 ) on Monday December 22, 2014 @09:04PM (#48656807)

      I'm so tired of this bullshit example being trotted out as evidence of how evil Uber is. Here's the facts of what happened in Australia:

      A bunch of people suddenly wanted Uber rides out of the area during the hostage situation. Uber's computers responded accordingly, and automatically, in activating the surge pricing. Whether you like the surge pricing or not, it's designed to get more drivers onto the road by providing the incentive of higher pay to meet the spiking demand. One would assume that at least some drivers are more likely to go out and pick up passengers when their phones alert them that they can suddenly make 4x the normal fare.

      When human beings running Uber in Sydney became clued in as to what was happening, they made all rides in the area free.

      Here's what DIDN'T happen: Uber in Sydney finds out about hostage crisis, says "omg let's charge 4x the normal fare because bunches of people are going to want rides and we can gouge them!"

      You can disagree with Uber's business practices, or how they run their business, and that's fine, but when you just start making shit up, you lose all credibility and take away from an intelligent conversation on what to do about Uber. You're the problem.

      • by CanadianMacFan ( 1900244 ) on Monday December 22, 2014 @09:35PM (#48656967)
        It isn't the first time this has happened to Uber. Maybe they should adjust their system so that if they see a sudden spike in requests it alerts the humans for instructions instead of just jacking up the price. They could put in scheduled events, like the end of a sporting event or concert, so that it wouldn't bother them.
        • With regard to concerts and sporting events, why should Uber make rides free during those events? One would think Uber drivers would go to such areas at the conclusion of the event in hopes of picking up fares, so there would be less need for surge pricing, and if there were was need for surge pricing, that would still serve the purpose of getting more drivers on the roads.

          Let's not forget a key point that everyone seems to ignore - NO ONE IS FORCING YOU TO TAKE UBER. It's merely an extra choice, meaning

          • I believe CanadianMacFan was stating that the sporting events and concerts would automatically cause the normal surge pricing, but unusual events would alert a human to deal with the issue to make sure Uber doesn't look like profiteering jerks. What they did with giving away the rides for free in Sydney was a nice thing to do to gain positive press, but if it had alerted a human, they could have told the software to keep the pricing normal and not cause a surge.

          • You missed the point he was making. He is saying to let surge price happening automatically under scheduled events (Concerts, sporting events, festivals, etc), where as any other time a massive uptick happens (such as the hostage situation), that it requires manual intervention before activating surge pricing. This wasn't about giving stuff up for free.
    • by gnupun ( 752725 )

      I'm okay with surge pricing as long as the reverse is also true. That is, when the demand is low, the fares should be below cost. So during periods of low demand, a typical govt regulated $10 taxi ride should cost $1-$2 on uber. This should be called slump pricing.

      • I'm okay with surge pricing as long as the reverse is also true. That is, when the demand is low, the fares should be below cost.

        That would be stupid, and so your idea is stupid, because you're demanding that other people behave stupidly. You don't operate a private transportation concern below cost. You just don't. Not for a minute and not for a mile. But you do charge what the market will bear, and in fact capitalism works better when you do that, because if you are leaving a market underserved then someone else will crop up to fill it, and otherwise the capital is not transferred away from those who have the most of it, who should

        • by gnupun ( 752725 )

          That would be stupid, and so your idea is stupid, because you're demanding that other people behave stupidly. You don't operate a private transportation concern below cost.

          Okay, it's stupid because you say it's stupid. But it's okay for predatory, opportunistic vendors to fleece customers at a time they badly need a service. It's okay to charge 10 to 20 times what it costs them to provide said service, but start whining about some law of nature (it's not) called capitalism to justify their ripping off peopl

          • Do the services lie unused? Uber drivers are independent people deciding if they want to be driving or not, given the fares. This isn't a taxi company which will have roughly the same number of cabs on the streets no matter what the demand, and even then the fare has to pay for the gasoline consumed. With Uber, drivers have to be willing to operate on the current fare structure. Therefore, given little demand, the supply will also go down.

            One thing that surge pricing does is inform drivers that they

    • What if you think about it as creating incentive to help people get the hell out of there creating a much needed service. If you didn't want it, just walk.
  • Uhhuh (Score:2, Interesting)

    by easyTree ( 1042254 )

    Ten applications were initially rejected by the U.S. Patent and Trademark Office for “obviousness”

    It seems pretty suspiciuos that the USPO only now has started to do their jobs - just when UBER's patent-applications crossed their desks.

    • by dryeo ( 100693 )

      Perhaps the patent examiners have actually used a taxi and are familiar with them?

    • Ten applications were initially rejected by the U.S. Patent and Trademark Office for “obviousness”

      It seems pretty suspiciuos that the USPO only now has started to do their jobs - just when UBER's patent-applications crossed their desks.

      Something like 95% of patent applications are initially rejected. People who claim the USPTO doesn't do their jobs conveniently ignore that fact.

  • It wasn't allowed because it is too obvious?
    For a patent office that allowed 1-click-purchasing, and anything that looks like "X on the net," this is a real change.
  • What a novel idea! (Score:2, Insightful)

    by Anonymous Coward

    Balancing supply and demand by raising prices? Who'd have thunk it?

    Wait, wasn't there some guy named Adam Smith...

  • Uber should create an algorithm to automatically detect when people will start whining to politicians about "price gouging".

    Then they can send their extra drivers home -- drivers who would be happy to provide high-priced rides. And they can make riders wait for hours -- riders who would be happy to get a ride now, even if it meant paying a high price. Everyone will be poorly served, but no one will be "price gouging".

  • by gnasher719 ( 869701 ) on Monday December 22, 2014 @08:24PM (#48656601)
    So when did they use "surge pricing" for the first time in public? Before or after the patent was filed? Performing it in public would be equivalent to a publication and stops it from being patentable.
  • by BoRegardless ( 721219 ) on Monday December 22, 2014 @08:26PM (#48656609)

    Adam Smith disclosed that centuries ago.

  • by roman_mir ( 125474 ) on Monday December 22, 2014 @08:36PM (#48656657) Homepage Journal

    So did Uber just rediscover supply / demand curve and the fact that increased demand with stagnant supply pushes prices up?

    I mean that's like the FIRST law of supply and demand, if demand increases and supply stays the same clearing prices go up.

    Well, let's see if the patent office knows anything at all about basic economics or if this will be accepted as an 'innovation because of ... computer or mobile phone'.

    • Re: (Score:2, Troll)

      Yes, and we all know that law does not exist, it is a simplification to explain 4 year olds how markets work.

      In reality a bakery bakes 1000 biscuits. There is a price sign which says 80cents. It does not matter if they are sold out at 4PM or at 6PM. It does not matter if there are only 100 left at 3PM, the baker won't increase the price. He still sells them for 80cents.

      The next day again: he won't increase the price to 85cent because all his customers coming and expecting the 80cents price would be shocked.

      • demand increased but supply did as well. that is the other part... as supply increases, price falls.

      • In reality a bakery bakes 1000 biscuits. There is a price sign which says 80cents. It does not matter if they are sold out at 4PM or at 6PM. It does not matter if there are only 100 left at 3PM, the baker won't increase the price. He still sells them for 80cents.

        But your example is bollocks, because Costeaux's bakery has raised the price on their walnut-cinnamon bread because they were selling it out too early. Raising the price has two results. One, customers buy less of it at once, so they are more likely to have stock in when someone comes in, which makes it more likely that this particular customer will come in again. Two, they make more per unit, so they make more. Not rocket surgery.

        In other words, bakers will increase cost to make demand, so you're just wron

  • by Anonymous Coward on Monday December 22, 2014 @08:41PM (#48656693)

    I used to use uber in London a lot even with surge pricing it was cheaper than a london taxi, and I could also get one. After a few months it became clear that some thing strange was happening with the surge pricing.

    After working late one night I requested a cab, it looked like it was going to be there in about 10 minutes. It was really late and there wasnt much traffic, but car stayed at about 10 minute away for some time. I could see where it was so I started walking a way that would put me in front of it. There were some closed roads and I could move around quicker than a car through the inner city.

    Eventually I am in the same street as the car, which is weird, because there is no traffic and no cars on the road, plenty parked though. My phone goes ding and the driver has canceled. I walk up to where the car was meant to be and find the car, parked on the side of the road. Swearing I pull out my phone and use uber, again surge pricing f#!k it I want to go home. I book, the car behind my driver pulls out and immediately picks me up.

    The street I was in was quite near my work and its once I was familiar with, at 3am in the morning it wasn't normally full but this night it was. I wonder how long it took them to game the system?

    • They were unwilling to pick you up until surge pricing kicked in. Don't see nothing wrong with that. Waiting for 10 minutes for an Uber car that is 2 minutes away is unfortunately normal too. Until they have taken away ability to track driver you can cancel as soon as you see driver doing something funny. I recently got a warning from Uber that for cancelling after 5 mins I will get charged, despite driver going in circles around my location. Cancel before 5 mins is up :)
  • By "others" I mean price-gougers like motels, airlines, etc. is that in these industries, EVERYBODY does it and they've been doing it for years so they get away with it. People expect airfare and lodging to cost more during holidays and special events. But Uber is a taxi company and taxi companies don't do this. It's simply not necessary. They have survived for decades charging whatever rate is posted on their door, which seldom changes due to inflation.

    But go ahead, Uber. Do what you want. Once people real

    • by Kohath ( 38547 )

      Once people realize they're paying more than conventional cabs, they'll be gone.

      If so, it's a self-correcting problem. If not, customers must be satisfied with Uber's service and pricing. Either way, there's no reason for anyone besides Uber and Uber's customers to be involved in the decision.

  • by raymorris ( 2726007 ) on Monday December 22, 2014 @10:10PM (#48657125) Journal

    I very much expected that the vast majority of Slashdot commenters would take Uber's side, just because their marketing shtick is anti-establishment making them the darlings of the Slashdot crowd. I'm glad to see, and slightly impressed, to see that the Uber fans here are apparently capable of seeing when the Uber execs are being dicks.

    At least ten patents so obvious they got kicked by USPTO already? If Uber is turning into a patent trolling company there might be some seriously conflicted people here on Slashdot.

  • This is another example of how Uber has advantages over taxis. Most, if not all, taxi fares are highly regulated. A taxi company can not "adjust", read hike, fares in response to demand. If they could do it fares would be much higher on the weekends than on the week days.

  • Clearly Uber will be sued once in a while for price gouging, tactics as old as world.

    Rather than treating it as a future potential liability they want to send a message now to the future uberzealous seekers of the fairness: look, the price gouging is our patent protected right, secured by the laws.

    Making a lemonade from lemons at its finest.

    • Rather than treating it as a future potential liability they want to send a message now to the future uberzealous seekers of the fairness: look, the price gouging is our patent protected right, secured by the laws.

      A patent doesn't actually grant you the (exclusive) right to do something. Instead, it allows you to prevent anyone else from doing what you've patented. If you patent something that involves an illegal action, you can still be sued/arrested for it.

  • by rnturn ( 11092 ) on Tuesday December 23, 2014 @12:59AM (#48657865)
    Some people might call what they're trying to patent price gouging.
  • So the good guys are now trying to patent free market economics? This is awesome.

  • Economists call this supply and demand, perhaps I should patent capitalism and become one of the idle rich.

  • by Anonymous Coward

    Really Uber is pretty much the definition of what a 21st century robber baron looks like. Attempting to set loose the rawest most destructive and most craven form of labor-competition on the people least able to defend themselves in a race-to-the-bottom style of economics which in the end benefits only the principals of Uber.

    Giving the finger to the processes and results of democratic law-making that define civilization, as opposed to rule by the powerful or rule by fiat. The laws regarding taxis and t

  • Even if this were patentable, it strikes me as a bad idea to be the company that patents it.
    Surge Pricing is already one of the most hated features of Uber. Even if that hatred is unfair, there is definitely going to be more pushback as Uber's business grows. When local governments and consumer groups inevitably start trying to sue them for "gouging," wouldn't it be better to have "common industry practice" as a defense, rather than being the only company that is doing it?

There is never time to do it right, but always time to do it over.

Working...