Uber CEO Faces Class-Action Lawsuit Over Price Fixing (engadget.com) 95
An anonymous reader quotes a report from Engadget: Uber CEO Travis Kalanick will go to court over price fixing claims after he initially tried to get the lawsuit dismissed. U.S. district court judge in New York ruled Kalanick has to face the class of passengers alleging that he conspired with drivers to set fares using an algorithm, including hiking rates during peak hours with so-called surge pricing. According to Reuters, district court judge Jed Rakoff ruled the plaintiffs "plausibly alleged a conspiracy" to fix pricing and that the class action could also pursue claims the set rates led to the demise [of] other services, like Sidecar.
While Uber has definitely engaged... (Score:4, Insightful)
Why the fuck can't taxies just offer good service? (Score:2, Informative)
What I don't get about all of this is why taxi companies can't just start offering good service. You know, like they fucking should've been doing from the very start!
It doesn't matter which city you're in. Taking a taxi is a goddamn awful experience. You'll likely end up with a third-world driver who doesn't understand the city's native language(s), nor English (the international language of everyone in the travel industry). These drivers will often drive like they're in a third-world country, putting you a
Re: (Score:1)
What I don't get about all of this is why taxi companies can't just start offering good service. You know, like they fucking should've been doing from the very start!
Because meaningful background checks, adequate maintenance, and paying people what they're worth costs more than padding some political pockets.
Re: (Score:1)
Because meaningful background checks, adequate maintenance, and paying people what they're worth costs more than padding some political pockets.
Yep.
Whenever I hear business say that they are "following the law" it's a wonderful copout because they are the ones who use their clout to make the laws - the rules. They make the rules so they win and everyone else loses; many times under the guise of "protecting the public".
And capitalism is supposed to work with some government rules. Without government rules, we'd have Somalia or Mexico - that's what you get when you have a weak federal government. Without some way to enforce contracts, force people
Re: (Score:2)
Whenever I hear business say that they are "following the law" it's a wonderful copout because they are the ones who use their clout to make the laws - the rules.
I haven't heard of any Taxi companies setting the laws, however I have heard of Taxi driver unions doing so.
Re: (Score:2)
Re: (Score:1)
Maybe what you consider a fair price is the price at which you get a "third-world driver who doesn't understand the city's native language(s), nor English".
Re: Why the fuck can't taxies just offer good serv (Score:1)
Diff AC here. From the city I live in, I can take a bus or train to other cities hundreds of miles away for less than the price of a short in-city cab ride. These buses and trains aren't particularly full, but they are well maintained. Something is strange when the cost of a 5 mile trip in a normal car driven by somebody with little more than a driver's license costs more than trips 50 times farther in much larger and more specialized vehicles requiring specially trained operators.
Re: (Score:3)
Taxi companies have to pay to purchase, service and garage their taxis whereas Uber pays exactly $0 for the above expensive costs, instead it leeches them from the driver. Given the above, since the driver is doing the bulk of the investing of resources, he should get more than the 70%.
We can hope there are dozens of internet-taxi booking services like Uber, making their service a commodity. Then we would have to pay only a token service charge around 5% of the fare (instead of 20%-30%) to the internet-taxi
Re: (Score:3, Insightful)
As a driver, you have two choices: you work for a taxi company or you work for Uber/Lyft/... Working for a taxi company, you get about $12/hour, at inflexible working hours and little personal freedom. The benefits of the tax
Re: (Score:2, Troll)
Speaking of hurdles, isn't this story about Uber setting up financial hurdles to prevent other internet taxi companies from entering the market and bankrupting the existing ones? Hypocritical much, mister crony? It's only bad if others do it, not your favorite company.
Re: (Score:2)
Re: (Score:2)
People are debating that, but it appears that generally, Uber drivers generally make about the same or a bit more than taxi drivers after expenses. You can Google it yourself.
Re: (Score:2)
Re: (Score:2)
The average cost per mile for US cars is about $0.60/mile. So, an hour or driving at around 20 mph (NYC, SF average speeds) amounts to about $12 in "cost of vehicle, maintenance, insurance, etc.", leaving the Uber driver with about $24/h. But, actually, Uber drivers can substantially lower their average costs per mile, so it's likely even higher.
Re: (Score:2)
Re: (Score:2)
That includes everything [aaa.com].
Why do people like you insist on substituting their own prejudices and superstitions for facts?
Re: (Score:2)
Re: (Score:2)
Your responses are as predictable as they are stupid. I suggest you figure out for yourself why the depreciation works out better for Uber drivers than for "the average passenger car".
I also find it fascinating that people like you try to argue that something results in substandard wages when Uber has 160000 drivers in
Re: (Score:2)
Re: (Score:2)
Given the above, since the driver is doing the bulk of the investing of resources, he should get more than the 70%.
As he does; with UberX/XL, he gets 80%; with UberBlack 75% and UberSUV 72%.
Re: (Score:3)
But can you explain why the consumer should pay more than 5% of the fare for the simple service of: "I'm at location X, find a nearby taxi willing to go to location Y?" 20% booking commission is outrageous.
Re: (Score:2)
But can you explain why the consumer should pay more than 5% of the fare for the simple service of: "I'm at location X, find a nearby taxi willing to go to location Y?" 20% booking commission is outrageous.
Can you name any service that charges less than 10%? Amazon, ebay, itunes, youtube, etc.. all charge a fairly hefty fee for bringing the customer to seller. Craigslist is the exception but they even charge significant prices in certain markets and they only have very basic search functions and have no way to bill or rate the other side. In theory you could hitch a ride on craigslist but not quickly. The best we can hope for is that competition continues to drive the price down but a company that has mor
Re: (Score:2)
But can you explain why the consumer should pay more than 5%
I don't need to. Either the consumer is willing to pay more than a given amount or they're not (as the case may be); regardless, that [respective] choice quite effectively communicates everything they need it to (except, perhaps, to fools and shills)
Re: (Score:2)
Taxi companies have to pay to purchase, service and garage their taxis
Actually, most taxi companies do none of these things. The taxis are owned by the drivers, and the driver pays a fee to subscribe to a dispatch service provided by the taxi company. In some cases the taxi company will also rent out medallions, but in many cases the driver owns the medallion.
Re: (Score:2)
You are right, a foreigner who can't speak English, and has no money has the capability to buy a used car, repaint it in the taxi colors, obtain a medallion and operate it using taxi company only for booking. Yeah, right.
Re: (Score:2)
You are right, a foreigner who can't speak English, and has no money has the capability to buy a used car, repaint it in the taxi colors, obtain a medallion and operate it using taxi company only for booking.
Most immigrant drivers pool their family money to buy the car, and then drive it in shifts with other family members. If a taxi is operating in three 8 hour shifts, seven days a week, it will pay for itself very quickly. Renting the medallion is a way bigger expense than paying for the car.
Re: (Score:2)
That is a rarity... most taxis are rented.
http://work.chron.com/much-far... [chron.com]
Re: (Score:2)
Why the fuck can't taxies just offer good service?
Until Uber arrived on the scene, they clearly didn't feel they needed to.
Re: (Score:2)
In Ottawa at least Uber came and they still haven't felt the need to offer good service. I should note that I have come across the rare good taxi driver so they do exist in Ottawa but the majority of them are more interested in their phones, for personal use, than dealing with their clients.
Re: While Uber has definitely engaged... (Score:2, Insightful)
How is this not price fixing? Do Uber drivers have the capability to set their own rates -- or are they all colluding and charging the same rate?
Re: While Uber has definitely engaged... (Score:4, Interesting)
Presumably they are free to set their own prices if working independently, but then they wouldn't be covered by Uber's insurance or booked via their app. I think the problem is likely to boil down to Uber's desire to have the drivers treated as independent contractors. 'CEO conspires with employees to set the price for services' isn't something that would make the news, it's what companies do. But if Uber is trying to pitch itself (to avoid being regulated as a taxi company) as a simple matchmaking service that pairs customers with independent drivers then also setting prices makes it look a lot more like a company that's offering a taxi service.
Re: (Score:3)
How is this not price fixing? Do Uber drivers have the capability to set their own rates -- or are they all colluding and charging the same rate?
Do taxi drivers have the capability to set their own rates, or are all the ones working for the same company colluding and charging the same rate?
I can understand the uproar from entrenched industry over an upstart company that's cutting into their profits, but let's at least stick to debate points where they differ.
Re: (Score:3, Insightful)
There, the price fixing happens via the government. Getting screwed and overcharged is OK if it's the government screwing you and the inflated prices and bad service happen as the result of lobbying and crony capitalism. Progressives, in fact, welcome that.
Re: (Score:2)
Re: While Uber has definitely engaged... (Score:5, Insightful)
Do taxi drivers have the capability to set their own rates, or are all the ones working for the same company colluding and charging the same rate?
Neither. The prices are fixed by law. Price fixing is not illegal if the government does it.
Re: (Score:2)
Do taxi drivers have the capability to set their own rates, or are all the ones working for the same company colluding and charging the same rate?
Neither. The prices are fixed by law. Price fixing is not illegal if the government does it.
Ah! So it's like the lottery and killing people.
Re: (Score:1)
In the same way that kissing your sleeping boyfriend in the morning [thecollegefix.com] might meet some legal definition of "non-consensual sex" but probably shouldn't be counted as such in a court of law. Price fixing laws, whether they technically apply or not, shouldn't apply.
Re:While Uber has definitely engaged... (Score:5, Insightful)
Perhaps the real purpose of this lawsuit is to put Uber into the position of recognizing that its drivers are not "independent contractors".
Uber is probably going to attempt some kind of "Schrodinger's driver", where the drivers are simultaneously both contractors and employees.
Re: (Score:2)
Perhaps the real purpose of this lawsuit is to put Uber into the position of recognizing that its drivers are not "independent contractors".
Hardly. You can most definitely be an independent contractor and still need to obey the rules of the contract set out. I believe these include discussions on prices pretty much 100% of the time.
Re: (Score:2)
So what you are saying is that two independent business entities have agreed on the price to be charged to a third party? That's pretty much the textbook definition of price fixing.
It would not be price fixing if the drivers were employees.
Re: (Score:3)
So what you are saying is that two independent business entities have agreed on the price to be charged to a third party?
No what I'm saying is two independent business entities *under contract* have agreed on the price to be charged *as per the contract* to a third party.
That's the textbook definition of drawing up a contract.
Re: (Score:1)
So you agree that Uber (and its drivers) are engaged in (possibly illegal) price fixing?
Re: (Score:2)
No I agree that Uber and it's drivers are engaged in a contract with a fixed price.
A distinct and perfectly normal situation from a legal standpoint.
Re: (Score:2)
It would be if the fixed price was what one party pays another. When the agreement is on how much a third party is to be charged, that's called price fixing.
Re: (Score:2)
Not at all. It's a standard part in sub-contraction clauses. Downstream costs (i.e. the price contractors are allowed to charge down the chain) is a normal part construction, manufacturing and likely many industries I don't work in.
It's only price fixing when multiple parent companies who should be in direct competition with each other provide services for a set price agreed upon. I'm not calling Jim Bob and his Mercedes. I'm calling an Uber. The Uber is and Uber regardless of who the contract driver is. I
Re: (Score:2)
Re: (Score:2)
Google "vertical price fixing". Idiot.
Well fuck me you just don't understand the difference between dealing with one company and dealing with multiple do you.
Up next, whoever57 (oh I just realised your nickname, it's almost poetic when used in this sentence) decides Apple is price fixing because it's product is the same price regardless of which store I buy it from. OMG THE VERTICAL PRICE FIXING.
*sigh* this no child left behind thing really isn't working on your side of the pond.
Re: (Score:2)
Independent Contractors (Score:3, Interesting)
Employees of a single company, by definition, can't collude to fix prices. But independent contractors sure can.
Looks like that whole "uber drivers are independent contractors not employees" thing has a lot of unintended consequences that aren't anywhere near as beneficial for Uber as they assumed.
Re: (Score:2)
Because it is price fixing? I can't see how you can't see this is what price fixing is. Please give me an example where independent agents setting a price by agreement is not price fixing
Re: (Score:2)
They are using a platform that calculates optimal prices for them, and that platform happens to give them all the same price. Why wouldn't it?
If that is illegal, then there is something wrong with the price fixing laws, not with what Uber does.
That's what the "fixing" in price fixing means (Score:2)
Yes but they are calculating that "optimal price" under the assumption everyone else follows that price. That is it is optimal only under the assumption of no defectors competing. that is when you fix the price by any means it is price "fixing".
Re: (Score:2)
They can't make that assumption because they don't have a monopoly: they are competing against taxis, Lyft, and other transportation services.
And that is why we shouldn't have anti-price-fixing legislation in the first place: price fixing only works under the assumpti
Re: (Score:2)
No that is price fixing. It doesn't matter if you use an agent or not. The mechainsm of collusion isn't important it's the outcome of a price not set by competition in a field of competitors. What would not be price fixing would be for uber to auction the job and take the low bidder. THey could do that automatically too.
Re: (Score:2)
Cab drivers are independent contractors in many places...which is probably where Uber got the idea from. I was a cab driver in New Orleans for six years and know for a fact every cab driver you see there is. Their rates are also set by the local government. When gas prices jumped up, they'd have to ask bureaucrats for a price increase....which meant you'd know something in a year or so if you kept asking. I suppose that's the difference they're trying to exploit between the traditional and uber in this scen
Re: (Score:2)
If I'm going to be up two hours before dawn and the only one available in a medium sized city to take people to the airport for the first flight out, I want to be paid more than if I got up at noon when there are a million other drivers online.
And... all other things being equal, basic supply and demand ensures you will be; when there are few Uber vehicles out and about, you're going to average more fares per hour than... oh, fuck; what's the point??
Re: (Score:2)
Re: (Score:2)
There's a meme for that -- price gouging!
That's not what it is, but you know, from a certain lawyerly pay me point of view...
Re: (Score:2)
Employees of a single company, by definition, can't collude to fix prices. But independent contractors sure can.
Where did you come up with this notion that Uber's pricing structure was in any way influenced by Uber drivers?!
Pricing by demand ... (Score:1)
If this is price fixing, then please could the court consider these others:
* Airlines that charge more or less depending on how full a particular flight is
* Electricity companies that offer a cheaper tariff at night (white meters)
* Supermarkets that mark vegetables/... down when they come near to the end of their shelf life
* Train companies that keep commuter time (rush hour) tickets higher than the middle of the day when the trains are not full
Re: (Score:2)
For that matter, why not just move on to seasonal pricing? What's the difference?
Re: (Score:3)
Re: (Score:2)
Re: Pricing by demand ... (Score:1)
Because all of those are single companies making decisions alone. Whereas Uber is conspiring with a set of independent contractors to set the price, because Uber has made it clear that they are NOT employees.
At least that would be the argument -- not that I necessarily agree with it.
uhh.... (Score:2)
including hiking rates during peak hours with so-called surge pricing
Oh no he's charging more when the supply can't keep up with the demand! how dare he?! Reminds me of the Taiwanese flood that disabled hard drive factories, hard drive prices shot up because supply twiddled. How is that immoral (let alone illegal) in any way? It's completely benign, they should go after assholes like Marty Skreli instead, and assholes that profit only from arbitrage and asshole tactics.
This is a surprise? (Score:2)
The Uber taxi service has been flouting the law since day one. Their taxi service does not pay the same fees, insurance os taxes that every other taxi service does, even though the people they hire are paid by them and rely on the services the Uber taxi service provides.
Not sure how this isn't obvious. The Uber taxi service is trying to simultaneously claim they don't fix prices while at the same time clearly doing so.
Let the games begin, and not in Uber's favor. (Score:2)
Between their licensing violations, classification abuse of contract workers, and their screwiness with pricing, it would be quite good to see the courts turn Uber to (a litigious equivalent of) a smoking crater.
Get rid of those three issues, and you would have a company that isn't sued for its Shkreli-like existence.