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Wednesday, November 04, 2015

Creating False Demand

Excessively requesting and cancelling rides can lead to surge pricing. In the past, Lyft and Uber may have engaged in this activity to affect the supply of vehicles available in these respective companies. As you may know, creating false demand is a problem among ridesharing companies. It is happening on UberPool, a carpooling service operated under Uber. How can false demand affect you as a rider?

Take for instance; Uber client and/or unknown entity requests a ride. The trip is canceled in less than 5 minutes. The trip is requested again from the same individual. Again, the client cancels the ride before 5 minutes and no cancellation fee is charged. This client is taking vehicles away from riders who really need them to reach the airport, home and to other destinations.

What makes this "requesting and cancelling" action a problem is possibly activating surge pricing in an area with low demand. Imagine how this action operating, on a grand scale, is influencing rides in these regions. Request, wait, and then cancel within 5 minutes. Drivers are taken off-course, forced to exit freeways to locate clients. All of a sudden, the ride is cancelled. Again, another ride is requested, and the same result occurs; it's cancelled.

Clients are redirecting drivers, making them drive around in circles. This action impacts the supply of vehicles, as these drivers are unavailable until a trip is completed and/or the ride is canceled.

The Outside Lands music festival is an event that is known to feature these type of clients. They request rides, wait 5 minutes, and then cancel based on time and distance. This happens 10 times in a row, and then the driver finally secures a reliable ride. Upon reaching a client, they call and inform the driver they need to cancel the trip. In 60 minutes, this driver nets only $4 from cancellation fee minus $1 safe ride.

Creating false demand affects both drivers and clients. Drivers are forced to re-route without secure rides to earn them fares. Serious clients need rides that are taken off the grid by non-serious clients. We then have technical issues in which trips are cancelled without neither the driver nor the client performing this operation. Frozen apps unable to start an end trips become a recurring problem.

Most certainly, creating false demand through requesting and cancelling rides based on a number of issues, likely surge pricing, will activate surge pricing and increase the cost of trips in that particular region. A client attempting to request a ride to the airport now is paying 3x the base rate. Without these requesting and cancelling actions, the client may pay less for this airport trip.

UberPool is another area of concern where clients request and cancel multiple rides. An occupied UberPool watches this re-routing in real-time. They see an UberPool request arrive, and then it is cancelled. The same process happens again. This client is re-routed on a surge, lengthening their time and distance in this UberPool ride. When the driver attempts to ignore a ride or two to drive this client going into circles, they are penalized in promotional deals in which 90% acceptance rate is required to receive matched earnings. They fall short a few percentage and this disqualifies them.

If this driver continued to accept all requests and watch all cancellations, their client would be stuck in this ride much longer and would pay a much higher fare price. There should be a limit to the amount of times a client can request and cancel rides no matter the 5 minute limit. These clients ruin it for the rest, since they're trying to game the system to avoid surge pricing - bringing a vehicle closer to their pickup address once this surge disappears.

We're all working together to make ridesharing services a reliable service. However, there are immoral people out there willing to disrupt flow. When this occurs, we all lose. Drivers are requested to further away locations, but are cancelled. Clients who need rides don't get them. The cost of rides for serious clients spike upward, increasing the cost of this ride.

Maybe there could be a new reward system introduced, where clients can earn a free surge based on accumulated trips. If they request a ride at surge pricing, they can choose to have this surge forgiven one-time only. The driver will receive the full cost of the fare, whereas the ridesharing company can gain access to recurring business. We believe that clients traveling to the airport will have a peace of mind knowing their surge forgiveness will alleviate their stress due to cost.

Please be fair to your fellow riders and drivers. Try your best to avoid requesting and cancelling rides multiple times. Because you don't get charged a cancellation fee, this doesn't mean that others are not impacted by this recurring action. For the most part, requesting a 10-35 mile pickup address and cancelling upon arrival is the most unethical action. This driver invested a lot of time and gas into retrieving you. His reward shouldn't be to receive $4 in return for this immoral action. Cancel rides ahead of time, or within a set time limit to free up vehicles. Thank you.