Pricing contortions at Uber and the regulated end game

Wednesday, January 22, 2020

Article

Uber's efforts to comply with California's new employment regulations - and prove that Uber is a tech platform, not a taxi firm - are entertaining to watch. The latest attempt is to let drivers set their own surge rate, initially on a trial basis at a few airports.

While this may help Uber evade the regulators, the consumer impact is to add yet more complexity and uncertainty to the pricing model, especially if apps to co-ordinate behavior amongst drivers emerge. But more interesting will be the California government's attitude to drivers setting their own prices: the risk of a rip-off was one of the motivations for London's landmark Conditions of Fitness taxi regulation, back in 1906!

For regulators interested in protecting consumers from predatory pricing and ensuring miniumum income standards for drivers, all while managing the congestion impact of taxis, intervention in pricing may again be irresistible.

Find out more about Nicholas Farhi, Partner

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