Modeless is actually in agreement with you, as I understand it. The distinction they're making is a bit of a fine one, but they're basically saying Uber ought to allocate all of the increase from the surge pricing to drivers rather than taking a cut. By not taking a cut Uber would more efficiently incentivize drivers to get out and take rides, and more rapidly affect an increase in supply and the corresponding price rebalancing. This would also have the happy side effect of making surge pricing wholly defensible, since Uber sees no benefit from it.

Whether or not that is feasible under Uber's business model is, of course, a totally different question.

What incentive is there for Uber to do this? Remember, they're a for-profit company, not a public service. If Uber didn't take a surge pricing cut, then the only reason they have to use surge pricing is to maximize the number of rides on the road. And that's certainly something they could do, as more rides == more money. But they'd be leaving money on the table that way, and as a for-profit company, there's very little incentive to do that. You stated that it would make surge pricing more defensible, which is basically the only reasonable incentive I can think of, but obviously Uber believes that it's in their interests to make more money than to have a stronger moral defense for surge pricing.

So I guess the real question is, for those of you who believe Uber should behave this way (and, w4, I recognize that you're merely explaining modeless's argument, not claiming you agree with it), do you believe Uber should be expected to behave this way, given that they are a for-profit company, or do you believe that it is merely the *right thing to do (for some ambiguously-defined moralistic definition of "right")? I suspect that what you really believe is that it's what you personally think should happen, because it would result in lower surge prices for the same supply, and you would like to pay less money. And that's not a very compelling argument.

Well, I mean, I do see the argument that it's a more efficient outcome.

Imagine for a moment that surge pricing were kept the same. The only difference is that, now, Uber takes no cut whatsoever. This would result in greater profits for Uber's drivers during a surge, better incentivizing drivers to get out on the street and start accepting fares. This increase in the incentive would, one can assume, result in an even greater increase in supply during a price surge than is produced under the current system, and more effectively address the supply and demand imbalance that creates the need for surge pricing in the first place.

Now, does Uber have a moral obligation to do this? Fuck no. However, it's certainly disingenuous to suggest that surge pricing is just all about addressing supply and demand imbalances.

(I'm not saying you say that's what it's all about; you don't. That is, however, what wutbrodo and a lot of other posters seem to be suggesting).

EDIT: As an aside, Uber's incentive (besides defensibility) for not taking a cut of the surge is clear: by making the incentive for drivers to get on the road as powerful as possible, Uber would all but guarantee that its users can get a ride at any time, any day, in any conditions. That would solidify Uber's primacy over other, less reliable transportation options. However, given that their product is already so superior to the alternatives, it doesn't seem to be the case that they need to look at doing anything like that for the time being.

I Shouldve added a quote since it's a bit unclear, but I was responding to the claim that surge pricing represent a "failure" go recruit enough drivers on ubers part (and thus that it's not fair for them to make more in those situations).

It is a 'please get out of bed' payment, to try and manage shortages of drivers.

If they could do this without tacking it onto price, by making an explicit 'please get out of bed' payment from uber to a fresh driver on their first fare during a shortage, they may be able to create the same economic incentive to the driver without being seen to price gouge. Of course, this would involve raising prices slightly overall to pay for it, but you get rid of the swings in price.