[msdivy]

Originally Posted by dozer

Perhaps Ola and Uber can specify their "MRP" rates per km and offer price discounts when the demand is low.

That is a great suggestion . It will make them more reliable in terms of pricing. Now I am hesitant to hail cab to a place since I can't know the maximum I might have to pay for return ride.

Originally Posted by Poloprasad

So he called their helpline number and the customer care person told him that the cab booking can be done only thru app.

Cabs can be booked on web - https://www.olacabs.com. You can choose starting point of any city for any day.

[reverse_gear]

Originally Posted by alpha1

You are confusing the difference between cost and value just like most of the people on this thread (as well as economics thread).
Value is something that you are willing to pay to buy a goods or service, and has NO connection to what it costs to provide you with that goods or service.

Manufacturing cost of a magnetic tape cassette might by Rs 50, but people will not be willing to pay even Rs 5 for it today. Therefore the value as measured by price would be <Rs 5.

Manufacturing an Apple iphone may be only Rs 10000, but the demand is so great, that Apple charges Rs 65000 and still it sells like hot cakes.

Uber has all the right to charge whatever they wish to charge. Even for the same vehicle and service. They are not govt employees working on fixed prices and margins. If the surge prices are "unjust", most people will not use the services and thus the demand will fall. This will lead to reduction in price. But since it doesn't happen that way we can only conclude that people are willing to buy the services even at surge prices.

THEREFORE at this moment, Rs30/km is the value of Uber cab. Not Rs10/km.

In addition, when Uber or Ola announce a surge price, the cabbies who are sleeping and whiling away time, offline, have an incentive to come online and pickup customers.

In real life the surge will exist only for a few minutes while there is a gap between the number of cabs demanded and number of cabs available. As soon as the sleeping cab drivers come online, or the impatient riders drop out (because of high prices), the surge goes away.


So I am sure you are not aware of the premium tatkal services?
Creating limits distorts the equilibrium mechanism. And eliminates any incentive to suppliers to increase their supply. This results in permanent shortage and long queues.

You are suggesting some kind of MRP. Any idea why the concept of MRP has come about? Do you know any other country where this concept of MRP is used?

I would suggest you look up the concept of "excessive pricing" which is a major anti-trust issue that is tackled by competition commissions around the world including EU, UK, US and India. There is no market around the world which allows abuse of pricing power indiscriminately. If Uber does this during times of emergency (such as taxi strike or flooding), it is plainly inappropriate. In fact, Uber had to settle a legal case in New York and withdraw surge pricing after an occasion when they imposed it during a hurricane. So why should they do it in India?

I am not suggesting that taxi companies should stop charging surge pricing, it is just that there is a responsibility that all companies have to ensure availability of a minimum standard of service at a reasonable price. This is a well accepted economic principle which the competition commissions around the world have implemented. It's not all black and white free market.

[NetfreakBombay]

Originally Posted by dozer

What if the premium train charged 4x it's own price during Diwali? Supply and demand logic indeed but there has to be limits.

Train and Airlines follow similar logic with Tatkal fares and various price bands for same airline seats.

[atulsian]

Originally Posted by reverse_gear

I would suggest you look up the concept of "excessive pricing" which is a major anti-trust issue that is tackled by competition commissions around the world including EU, UK, US and India. There is no market around the world which allows abuse of pricing power indiscriminately. If Uber does this during times of emergency (such as taxi strike or flooding), it is plainly inappropriate. In fact, Uber had to settle a legal case in New York and withdraw surge pricing after an occasion when they imposed it during a hurricane. So why should they do it in India?

I am not suggesting that taxi companies should stop charging surge pricing, it is just that there is a responsibility that all companies have to ensure availability of a minimum standard of service at a reasonable price. This is a well accepted economic principle which the competition commissions around the world have implemented. It's not all black and white free market.

+1. Uber and Ola surge pricing are going very high in my city. The maximum I saw is 5X What I have observed in last few weeks is that they are by default increasing the price on Fridays and weekends.

[Jaggu]

Originally Posted by nareshov

Have you tried leaving feedback through the app? I've made both positive and negative feedback several times and I get a prompt response. Perhaps if more people gave similar feedback it might help us in the long run?

Yup promptly replied back in standard format, i had to reply back again to tell the feedback is more than current drivers. Again another standard copy paste reply. I lost my love at that, now let them go figure

[alpha1]

Originally Posted by reverse_gear

In fact, Uber had to settle a legal case in New York and withdraw surge pricing after an occasion when they imposed it during a hurricane. So why should they do it in India?

And I would ask you to tell me when exactly an anti trust law is applicable.
Does Uber hold a monopoly?
Does the Govt not provide a cheaper, more abundant alternative?

Have you ever though of taking up Apple for Antitrust?

People everywhere are the same. Whether it is New York or Mumbai. Populist measures only win votes. Not economics.

I hate repeating myself but I must since everyone is speaking about price control etc:

"
... competition among sellers is absolutely loved and promoted by them. In fact they love the fact that it usually leads to lower price for the buyer (consumer). However, when there is competition among buyers (consumers) which turns on the heat and leads to price hike - they come out with pitchforks crying devil to burn the sellers who are branded as heretics.
"

You have a problem with surge? Simple, don't ride Uber.
The prices will come down. You are miffed because it usually doesn't.
Blame other users who are lapping up Uber at higher prices.
You are competing against the other users who can afford higher price.

[joslicx]

Couple of my seniors have launched a new Taxi service called AHAtaxis dot com, Their USP is One Way fares on taxi booking! it could be very useful for travelers visiting their hometown (for example if somebody is from Agra, You could fly to Delhi and take a taxi to Agra and pay only one way fare). Minimum charges for 250KM still apply.

Are there any other Taxi services that allow one way fare?

Disc: I am not associated with AHAtaxis. In fact they have a coupon FRIEND for Rs 500 discount on offer that I can share.

[reverse_gear]

Originally Posted by alpha1

And I would ask you to tell me when exactly an anti trust law is applicable.
Does Uber hold a monopoly?
Does the Govt not provide a cheaper, more abundant alternative?

Have you ever though of taking up Apple for Antitrust?

Antitrust law is not only for monopoly situations, it is also used for excessive pricing, unfair business practices and protection of consumer interests. The specific comment on surge pricing came from a situation where the black & yellow cabs were off the roads, when Uber decided to impose 5x surge pricing. In such a situation, Ola and Uber would together be well over half of the cabs on the roads.

I am not sure about the relevance of Apple comment here. You might as well have said Louis Vuitton.

Originally Posted by alpha1

People everywhere are the same. Whether it is New York or Mumbai. Populist measures only win votes. Not economics.

Re. New York example, Uber AGREED to a settlement of their own choice. And they are now following this new policy over there. You will agree that Uber does not do things because of populism, they are only interested in making more money. The only reason they agreed to a settlement was because they knew that their actions were improper. Why not the same policy in India then?

Originally Posted by alpha1

You have a problem with surge? Simple, don't ride Uber.
The prices will come down. You are miffed because it usually doesn't.
Blame other users who are lapping up Uber at higher prices.
You are competing against the other users who can afford higher price.

It may not be relevant to the discussion, but to put it on record, my usage of Uber has been occasional and when I have used it, I haven't faced any problems whatsoever, including of surge pricing. I have used Ola and TFS many times, but I don't think I ever paid surge pricing. I do not have any personal complaints against them and I believe that all of them are making local transport much better. The issue of surge pricing (and particularly the extent of surge pricing) is a lot more complicated than just saying "don't ride Uber". To give you just 2 points:
- if Uber was such a patron of free markets, why not just allow drivers to bid their own prices for every ride? When a customer requests for a ride, they should just allow all drivers in the area to bid their lowest price for a pick up, and offer that to the customer.
- Uber themselves says that they impose surge pricing so that they can incentivise more drivers to make themselves available. This means that surge pricing kicks in when supply is lower than it should be. In such a case, demand-supply mismatch is artificially created by drivers not being on the road. So, why not commit that they will impose surge pricing only when at least 90% (as an example) of their drivers are available for rides?

Across the world, regulation has not caught up with the phenomenon created by Uber.

[Soumyajit9]

Just got ripped off by OLA last night.

Returning from Airport, booked an OLA Mini to home - About 46kms.
I got a pop up saying Peak Charges will be applicable since it was 10:30 PM. My foolishness and clicked OK, Confirm.

(No idea who comes up with these silly ideas of peak charges at OLA, when the market competition is so damn high !!)

Paid Rs.1675 for the 46kms ride in a Verito Vibe (OLA Mini). That is crazily expensive than the regular Ola Sedan or any Innova for that matter !!
Standard Meru / Easy / KSTDC cabs cost me Rs. 1000 max.
BMTC Bus ticket costs Rs.250.

Phew ! I am totally broke.

[alpha1]

Originally Posted by reverse_gear

Antitrust law is not only for monopoly situations, it is also used for excessive pricing, unfair business practices and protection of consumer interests. The specific comment on surge pricing came from a situation where the black & yellow cabs were off the roads, when Uber decided to impose 5x surge pricing. In such a situation, Ola and Uber would together be well over half of the cabs on the roads.

I am not sure about the relevance of Apple comment here. You might as well have said Louis Vuitton.

So the better question would be how dare the Govt favored yellow taxis with regulated fare be off the roads at their slightest inconvenience?

Antitrust is ALWAYS invoked when there is a long lasting monopoly condition a consequence of which is increased prices.

Otherwise as you are yourself leading the discussion to, we should use anti trust against Apple and Louis Vuitton simply because of the "insane pricing".

Re. New York example, Uber AGREED to a settlement of their own choice. And they are now following this new policy over there. You will agree that Uber does not do things because of populism, they are only interested in making more money. The only reason they agreed to a settlement was because they knew that their actions were improper. Why not the same policy in India then?

Uber may ultimately be forced to do the same here also. That doesn't mean they are currently doing something wrong. It will just mean that in order to operate business anywhere in the world sustain-ably you have to project a socialist face. Democracy works on election - therefore all measures HAVE to be ultimately populist. The Delhi Uber rape case is a great example.

Tata not being allowed to start their plant in WB or Posco and Mittal facing thousands of hurdles and backing out eventually. It doesn't mean that the businesses "admit" that they were doing "wrong" or "improper".

- if Uber was such a patron of free markets, why not just allow drivers to bid their own prices for every ride? When a customer requests for a ride, they should just allow all drivers in the area to bid their lowest price for a pick up, and offer that to the customer.

Great idea. This will work just like the packers and movers segment, where the transporters bid, and the lowest wins the order.
And I have no opposition to this idea.
Although I am not sure how efficient and fast this mechanism would be. It may become exactly like how it is today with the auto, where I waste about 10-20 minutes haggling and looking out for the right auto.

Not that I have a problem with this.
Why don't you start a venture on these lines? Seriously - if the customers see better benefits, they will make a jump from Uber to your platform in a heartbeat.

I will give you one reason why your idea may turn out to be superior to Uber. It may allow even lesser than govt enforced tariff rates under certain conditions. To understand this, please scroll down.

- Uber themselves says that they impose surge pricing so that they can incentivise more drivers to make themselves available. This means that surge pricing kicks in when supply is lower than it should be. In such a case, demand-supply mismatch is artificially created by drivers not being on the road. So, why not commit that they will impose surge pricing only when at least 90% (as an example) of their drivers are available for rides?

Let me try once again.

There are 100 cabs available right now in Mumbai.
There are 100 passengers right now.
The current price is Rs15/km.

====

Case1A:
Suddenly there are 200 cabs now. (say 100 more decide to join in from UP-Bihar, since the state govt is under less foolish power)
There are still 100 passengers.
The current price will have to lower to such levels (say Rs 10/km) that 100 taxi drivers become disinterested and drop out and do something more productive.

====

Case 2A:
Now let us consider reverse case:
Suddenly there are 200 passengers because of office hour rush, but 100 cabs only.
The prices will have to rise to such levels (say Rs 20/km) that only 100 passengers remain interested in pursuing the cab, the rest drop out and take an auto (Rs12/km).

This is how in short demand supply gaps exist and are brought to equilibrium via dynamic market pricing. There is no artificiality here.

####

Now lets us revise the Cases once again.

Case 1B:
Since the prices dropped to Rs 10/km, more passengers become aware of the lowered fare. Thus more decide to upgrade from auto (available at Rs12/km) to cab.
Therefore we may see the current demand rising from 100 to perhaps 200.
Oh but we had 200 cab drivers, out of which 100 had pulled out. So these 100 "surplus" drivers will be available to cater to new demand of 100 customers. And the price will once again reach Rs15/km levels


Case 2B:
Since the prices increased to Rs 20/km, more drivers become aware of the higher fare. Therefore we may see the current supply rising from 100 to perhaps 200.
Oh but we had 200 passengers, out of which 100 had pulled out. So these 100 "surplus" passengers will be catered by new supply of 100 drivers. And the price will once again reach Rs15/km levels


The Case 2A is exactly what happens with Surge. Case 2B unfortunately doesn't happen because there are indeed lesser cabs than the peak number of passengers during certain times.

Your startup idea can tap into the Case 1A and 1B situations also! Thus leading to a lower than State Govt fares.

####

If I fix the fares at arbitrary value, Case 1A will keep 100 cabs un-engaged and idle all the time!
Case 1B will never arise!

Case 2A will result in 100 passengers moving to the buses or waiting forever for the cabs.
Case 2B will never arise!


Ah, now do we realize why yellow cabs and auto were not available ("for me") on the rainy day? And why we see them whiling their time otherwise the entire day.

[hserus]

Kind of OT but this doesn't seem unique to India. France just arrested Uber France's CEO and the GM of Uber Europe after complaints from taxi unions that Uber was running an unlicensed taxi service. http://techcrunch.com/2015/06/29/ube...-taxi-company/

[sudev]

@hserus entrenched interests at play? Technology enables and great changes are bound to follow.

I for one do not subscribe to theory that rape and app cabs go hand in hand. Nor that Government is best regulator.

Overall I am happier with changes while keeping in mind market maxim " buyer beware "

[NetfreakBombay]

Originally Posted by alpha1

Uber may ultimately be forced to do the same here also. That doesn't mean they are currently doing something wrong.

Uber was clearly at fault in NY and Paris. Issue is they let drivers without commercial insurance and license pick up customers.

In such case, passenger will not get anything from insurance in case of accident.

Anyone who is using his/ her personal car without commercial insurance and commercial driving license is certainly breaking the law and putting customers at risk.

Higher tier Uber cars that require commercial registration + license + insurance did not have this issue.

[Vid6639]

Be careful with Ola. A fellow BHpian ended up paying Rs.1,700 for a cab ride from Airport to BTM layout. A ride which will not even be Rs.500 with Uber. Even the Mega/Meru's are cheaper.

Seems some peak hour or off peak hour charges are levied. Unlike Uber which asks for confirmation twice on surge pricing, Ola might not be warning the rider.

Edit: This is the BHPian I was referring to

Originally Posted by Soumyajit9

Just got ripped off by OLA last night.

Returning from Airport, booked an OLA Mini to home - About 46kms.
I got a pop up saying Peak Charges will be applicable since it was 10:30 PM. My foolishness and clicked OK, Confirm.

Paid Rs.1675 for the 46kms ride in a Verito Vibe (OLA Mini). That is crazily expensive than the regular Ola Sedan or any Innova for that matter !!
Standard Meru / Easy / KSTDC cabs cost me Rs. 1000 max.
BMTC Bus ticket costs Rs.250.

Phew ! I am totally broke.

[reverse_gear]

Originally Posted by alpha1

Uber may ultimately be forced to do the same here also. That doesn't mean they are currently doing something wrong. It will just mean that in order to operate business anywhere in the world sustain-ably you have to project a socialist face. Democracy works on election - therefore all measures HAVE to be ultimately populist. The Delhi Uber rape case is a great example.

Please read the following and decide for yourself.

http://ag.ny.gov/press-release/ag-sc...es-and-natural

The same policy applies nation-wide in the US. All I am saying is why not apply it in India? I don't have anything more to say on this topic.