The real effect of surge pricing

While Uber is coming under a lot of fire (including from me) on its surge pricing, Wired’s latest piece on Uber’s situation clarified a point that is worth highlighting.

Surge pricing, according to Uber, is intended to stimulate supply and curb demand to ensure the two match. Otherwise, the logic goes, would-be riders are left stranded without a car. Last month, during the height of the backlash against Uber over fares reported at seven times the usual during a New York snowstorm, Kalanick told WIRED that the bad publicity his company faced over surge pricing would pale compared to the impact of Uber not being able to offer a ride at all.

(Emphasis mine.)

This is what Uber and CEO Travis Kalanick are doing with surge pricing: they’re getting the masses to back off. Anyone who’s encountered a surge pricing screen on Uber in the past few months has done so while trying to reserve a car that’s only a few minutes away, as usual. That car is available because of surge pricing—specifically, because higher prices get fewer people to grab at finite inventory, maintaining a decent supply.

Of course, Kalanick can’t say that out loud, so he talks at length about bringing more cars on the road. Yet that’s only part of the story, and he’s been challenged on whether surge pricing really aids supply. In truth, what surge pricing really accomplishes is throttling demand.

And this makes sense: if an Uber user tried to call for a car in bad weather, and the nearest vehicle was 27 minutes away rather than 6, or not available at all, what would the response be? Customers would give up on the service for lack of reliability, and return to hailing cabs and calling car services, which are equally imperfect but entrenched in society. Uber is not, at least not yet. To the company, “Uber doesn’t work” is a worse fate than “Uber is sometimes too expensive.” So premium fares continue.

Uber has decided that supply is the most important link in its chain, and is using surge pricing to maintain it. Which, while not the most satisfying thing to Uber users, is a rather logical approach.

Update: this wonderfully in-depth look at Uber’s economic and business decisions sheds additional light on the subject.

The bottom line is that the only real alternative to dynamic pricing is a ton of customers staring at screens that read “No Cars Available.” This is the fact that is least appreciated by Uber’s critics.

Obsolete vs. useless

Quartz and Wired is making a big deal today out of a new survey that shows 58% of American households still have a VCR.

“It shows,” writes Christopher Mims*, “that a majority of Americans are holding onto a device designed to play a media format that isn’t even available anymore.”

But there’s a reason for this “lingering on past their expiration date,” as Mims nicely puts it: old VHS tapes.

While millions of Americans have moved on from tape formats, decades of media were created and stored on them before discs, drives and cloud storage appeared. And while it’s easy to replace that videotape of “Dirty Dancing” with Blu-Ray or a stream, doing so with home movies and one-offs taped from live TV is much harder. Many families have paid for a service to migrate their essentials; mine has dubbed its childhood videos from Super-8 to VHS to DVD over the past 15 years. But many others have not. And until they do, they’re not ditching their VCRs.

I still have roughly 800 cassettes in my possession (well, technically, they’re in my parents’ basement, to my mother’s ongoing chagrin, but still), including a number of bootlegs, one-offs, hard-to-find albums, and irreplaceable moments, from a Taj Mahal concert at summer camp in 1989 to my college radio shows. It’d be great to digitize them for posterity. But seeing how hard it is even to move all my CDs to MP3, the digitizing of my tapes won’t come for awhile. And while I wait for myself, I’m glad to have a working cassette deck, still gorgeous in its anachronistic 1988 glory.

So color me unsurprised at the persistence of the VCR. It remains peripherally useful for many, even in the rarest of moments. And so it remains, unbothered in many homes’ wall units, biding its time, and probably blinking ––:–– as usual.

* Of course, Mims is the author behind the recently infamous “2013 was a lost year for tech,” which suggests he’s in the dot-com-needling-provocateur game right now, much like Farhad Manjoo a couple of a years ago.

Creating vs. creating

Sploid, on Thomas Julien’s Instagram short film: “Seeing all these pictures in a pseudo stop animation you realize how similar all of our photos end up being. Nothing is original. We’re all just frames in someone’s next movie.”

I’ve been thinking a lot about our collective propensity to take photos, and wondering: why? Why do we need to chronicle a moment that is being captured by another? What is the intrinsic value of a photo that someone else can (probably more capably) take on one’s own behalf? It’s one thing to grab a picture of a loved one, or a sunset on an unpopulated beach, when you’re the only person that can take that picture. But when hundreds of fellow onlookers are snapping the same photograph, unless your DSLR skills trump the crowd, is there value to your taking a shot, too?

Jillian Edelstein, on the remoteness of photography: “It’s image taking rather than image making.”

What’s more, with the interconnectedness of social media, not only are those many other photos being taken, but in a matter of moments you and I can download and share them as well, rendering the multiplicity moot. Sometimes these efforts have value; last month, when a large fire raged up the block from me, I posted photos from my vantage point, then shared others’ images from different (and largely better) angles. But certainly my experience of the moment was interrupted by my fiddling with my iPhone, which, it should be noted, occurred while I helped my two young children stand on my next door neighbor’s radiator cover for a better view.

This can’t be where our future lands. Whether ubiquitous, wearable computing simplifies the media taking-and-sharing process, or whether we slowly learn to find the right moments to engage and disengage with our devices, or whether some other paradigms arise, I strongly hope that we evolve past the current heads-down phones-up phase. Because, if not, sooner or later we’re all going to miss something.

The year in cities, 2013

Ninth edition: listed here are the places I visited over the past 12 months. Per the annual rules, only overnights are listed; repeat visits (from anytime in the past) are denoted with an asterisk.

New York
Akron, OH
Atlanta, GA *
Livingston, NJ *
New City, NY *
London, England *
Avignon, France
Paris, France *
Cleveland, OH *
Groton, CT
Edgartown, MA *
North Creek, NY *
Jacksonville, FL
Portland, OR
Paradise Island, the Bahamas