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In recent years, Uber has become a household name amongst millennials for their easy and accessible service. All you have to do is open your phone, push a button and as long as you don’t puke in the cab, you’ll be easily and affordably transported to your next destination with a solid five-star rating. However, it was recently announced that the app based taxi-company is being sued by San Francisco taxi company Flywheel Taxi for alleged predatory pricing. If you don’t know what predatory pricing is, let me quickly explain. In short, it’s when a company begins to offer goods at such a low level that other suppliers cannot compete.
In this particular case, Flywheel alleges that Uber is using the billions it has in funding to outprice its competitors. The complaint notes, “From July 2012 through the present date, the taxicab industry has experienced an approximately 65 percent decline in ridership and has lost more than 30 percent of its drivers as a result of Uber’s illegal actions” but fails to mention how shitty most cabs actually are.
In all honesty, it’s shocking that those percentages weren’t drastically higher considering the last standard cab experience ended up with some cabby driving me on a 10-mile “shortcut” racking up my fare in the wee hours of the morning.
With Uber’s customer service just being an e-mail away, driver ratings, GPS tracking for its drivers, and overall ease of use I can only assume the 65 percent of remaining riders still using standard cab services are the elderly and hipsters. Both of whom take the time to dial up their next fare from their antique rotary phones.
It will be interesting how this all pans out in court. Best of luck to the plaintiff’s legal team, especially if they have to try and hail a yellow taxi in order to get to court on time. .
[via Forbes]
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@ben_w88
*sigh* Anyone who paid attention in Econ 101 knows this is false. Predatory pricing doesn’t work. It doesn’t exist. Uber’s prices aren’t artificially low – the taxi’s prices are artificially high. Thanks to licensing and regulation, taxis can operate as a monopoly thus spiking prices because of lack of competition. Uber came along offering a better product at a lower price. Low price, high volume sales will trump high price, low volume sales any day of the week (ex. Toyota makes more money off Camry sales than ES sales). People gripe about companies “not playing by the rules” but the rules in place are meant to serve the politically connected.
Sorry, y’all. I’m a fuckin nerd who reads econ textbooks for fun. Carry on.
I never said Uber was using predatory pricing, just that they’re being accused of it in this case.
I also agree Uber is way better, but maybe I wasn’t clear enough with my line, “fails to mention how shitty most cabs actually are.”
I don’t think he/she was trying to contradict you. Just the lawsuit. They were explaining why they think it’s a pointless lawsuit.
My bad, fam. I wasn’t shooting the messenger. Just pointing out the bullshit. We’re good.
Sounds good. How about we just settle this with a beer and a handshake.
“Lagers & Laffer Curve” would make a great podcast…
*clears throat*
Looking at you, Grandex.
my ubers are cheap because i use uber pool
PGP
I think what’s most fucked up is that all taxis have to do to regain their competitive edge is literally not be assholes. I’m happy to pay a similar fare (not including tip) if I don’t feel like I’m being hustled or treated poorly. FFS, DC had to introduce a $3000 fine for cabbies to stop telling people “the card reader’s broken” because it was such a problem.
Until then, I’m going to take the UberX driver who’s going to get lost several times and add a few minutes to my trip.
I’m with you 100%. I live in the suburbs, but when I go into Chicago I usually stay at my aunts, who lives in what we’ll call an “underserved” area (they bought a house when the area was on the come up right before the economy took a dump). Once über and Lyft came into the fold, my days of waiting over an hour for a cab because the were “busy” were over. I do feel bad for the non jagoff drivers who pay money for medallions (which is a horseshit system as far as I know) and are losing out on money. But until regular cab companies are on par with ride sharing, I’ll be in a Lyft.
Some places still don’t have uber. Because their city leadership are comprised of a bunch of gooch licking morons.
My ubers are cheap because I tack on 50% to what I guess a taxi might cost to account for the winding routes, lack of GPS, and them being “all out” of change.
Lyft is even cheaper.
Most of their lawsuits are because of their Employee/Independent Contactor misclassification. Current and former drivers are suing the companies saying they’re actually employees that have rights to certain benefits that they aren’t getting under the IC classification. Because they’re classified as such, Uber can charge less for rides because they don’t have higher overhead associated with having employees
Yup this is spot on.
Based on my understanding of the law because uber doesn’t have all that much control over their drivers and they use their own car it is unlikely that they will win employee classification.
Their prices so low because they pay drivers nothing! At least when you take a real taxi, you have trusted drivers who pass background tests. I use E-HAIL (www.goehail.com) same technology but real drivers.