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The things we do: Why people hate Uber’s surge pricing so much

Roxanne Bauer's picture

Globally, citizens from Guadalajara to Chengdu both love and loath ride sharing app, Uber. 

We love it for the convenience, the ease with which we can pay, and the ability to avoid intemperate weather conditions— all though a few taps on our mobile phone. 
But… we loath it when surge pricing is in effect.  “Surge pricing” increases the cost of rides by many times the normal fare when demand is swelling, most commonly at rush hour, during inclement weather, or on a public holiday.  In these cases, the supply of drivers is constant or even low, creating a shortage of available rides.  By raising the price of each ride, Uber encourages more drivers to pick up passengers and rations the available supply of rides to the customers who value the service the most (those who are willing to pay more).
 
Nevertheless, while surge pricing may make economic sense, it feels like price gouging for many customers.  The recent clampdown on surge pricing by the Delhi and Karnataka governments illustrates the intense debate over Uber’s policies that has been circulating worldwide. Delhi chief minister Arvind Kejriwal even called surge pricing “daylight robbery”.
 
The debate has polarized opinion not just in India, but also in cities as diverse as Sydney, Paris, New York and Budapest. The reaction is even more severe when there is an emergency, such as during the December 2014 hostage crisis in Sydney, where a masked gunman held people captive in a café. As the central business district was cleared out by police, surge pricing automatically kicked in. Customers were appalled by Uber’s apparent insensitivity to the situation. The outrage grew so intense that Uber was forced it to suspend surge pricing and offer free rides.

Quote of the week: Ariane de Rothschild

Sina Odugbemi's picture

Ariane de Rothschild“In Africa, there is a lightness of being, probably because you have no choice. There’s a lot of poverty, misery, death, but people there have this joy of life. It’s very strong. You laugh a lot, you joke a lot, you have a warmth about you … I think, ‘You know what, we all have problems, good and bad [but] it’s a matter of posture, vis-à-vis life.’ ”

- Ariane de Rothschild, President of the Executive Committee of Edmond de Rothschild since 2015, and vice-president of the Edmond de Rothschild Holding SA since 1999. She also devotes a considerable amount of time to philanthropy through a historical network of family foundations, including the Edmond de Rothschild Foundation. She began her career as a trader in foreign exchange and metals with Société Générale in Australia and in New York. She then joined US insurance corporation AIG and developed the group’s European operations from Paris, France. She married Benjamin de Rothschild on January 23, 1999.

A Call for Global Action against Corruption

Stephen Zimmermann's picture

Supreme Court of Canada“Corruption is a significant obstacle to international development. It undermines confidence in public institutions, diverts funds from those who are in great need of financial support, and violates business integrity. Corruption often transcends borders. In order to tackle this global problem, worldwide cooperation is needed. When international financial organizations, such as the World Bank Group, share information gathered from informants across the world with the law enforcement agencies of member states, they help achieve what neither could do on their own.”
 
This statement was made not by someone from within the World Bank Group, underscoring the value of the Bank’s work in the fight against corruption. It is the opening passage of a decision by the Supreme Court of Canada issued on April 29, 2016 in the World Bank v. Wallace.  By endorsing the integrity efforts of international organizations while upholding the privileges and immunities of the World Bank, the Court’s decision serves as a reminder that better results in the fight against corruption can be achieved when all the actors in the global fight come together in their respective roles.  The investigation and prosecution that led to this decision stand as a clear example of the power we can harness when we work together. They also illustrate the challenges of aggressively fighting corruption while simultaneously pursuing a development agenda focused on ending poverty.

In 2011, the World Bank’s Integrity Vice-Presidency learned that representatives of SNC-Lavalin were planning to bribe officials of the Government of Bangladesh to obtain a contract related to the construction of a bridge over the Padma River.  The World Bank had already agreed to provide more than one billion dollars in financing for this project that was projected to be among the most significant and impactful development projects in the region.  As INT’s investigation unfolded, it voluntarily shared information of its findings initially with the Royal Canadian Mounted Police (RCMP) and subsequently with the Bangladeshi Anti-Corruption Commission. 

Weekly wire: The global forum

Roxanne Bauer's picture

World of NewsThese are some of the views and reports relevant to our readers that caught our attention this week.

What If We Just Gave Poor People a Basic Income for Life? That’s What We’re About to Test.
Slate
Over the past decade, interest has grown in an ostensibly unorthodox approach for helping people who don’t have much money: just give them more of it, no strings attached. In the old days of policymaking by aphorism—give a man a fish, feed him for a day!—simply handing money to the poor was considered an obviously bad idea. How naïve—you can’t just give people money. They’ll stop trying! They’ll just get drunk! The underlying assumption was that the poor weren’t good at making decisions for themselves: Experts had to make the decisions for them. As it turns out, that assumption was wrong. Across many contexts and continents, experimental tests show that the poor don’t stop trying when they are given money, and they don’t get drunk. Instead, they make productive use of the funds, feeding their families, sending their children to school, and investing in businesses and their own futures.

Media as a Form of Aid in Humanitarian Crises
Center for International Media Assistance
As the humanitarian crises following the Arab spring enter their sixth year, the media coverage of war, displacement, and migration in the Middle East and North Africa tragically have become all too familiar. For mainstream media, the millions of people whose lives have been upended are mostly data points, illustrations of the misery and upheaval that have swept across Syria, Yemen, Gaza, Iraq, and many places between. Yet for those who are caught in the crises, and plagued not only by insecurity and uncertainty but a lack of information, relatively little is available to help them make informed decisions for their own survival.  CIMA’s report, Media as a Form of Aid in Humanitarian Crises, examines how humanitarian crises around the world have led to a major change in the priorities and approaches in media development efforts. 
 

Media (R)evolutions: A 'deep and disturbing decline' in media freedom worldwide

Roxanne Bauer's picture

New developments and curiosities from a changing global media landscape: People, Spaces, Deliberation brings trends and events to your attention that illustrate that tomorrow's media environment will look very different from today's, and will have little resemblance to yesterday's.

It is widely acknowledged that a basic precondition for inclusive, democratic societies to function is a well-established and protected freedom of the press. A free press is one where political reporting is strong and independent, the safety of journalists is guaranteed, state intrusion in media affairs is minimal, and media are not subject to burdensome legal or economic pressures. Under these conditions, free debate, challenges to authority, and new ideas are all possible.
 
Nevertheless, “there has been a deep and disturbing decline in respect for media freedom at both the global and regional levels,” in recent months according to the 2016 World Press Freedom Index. The World Press Freedom Index is an annual ranking and report on global media freedom around the world, produced by Reporters Without Borders (RSF). RSF attributes much of the global decline to antagonistic politics, new security laws, increased government surveillance, and physical attacks on journalists that all stifle the spirit of investigation and send chilling messages to journalists and media outlets. 
 
This map shows the countries where media are free to report the news and where the media is strictly controlled.
 
World press freedom visualised
Infographic: World press freedom visualised | Statista
You will find more statistics at Statista

 

Payment by results in aid: hype or hope?

Duncan Green's picture

Is payment by results just the most recent over-hyped solution for development, or is it an effective incentive for accelerating change?

Madeleine has a 17 month-old daughter who was born at the village's primary health facilityWhen reading up on payment by results (PbR) recently I was struck by the contrast between how quickly it has spread through the aid world and how little evidence there is that it actually works.

In a way, this is unavoidable with a new idea – you make the case for it based on theory, then you implement, then you test and improve or abandon. In this case the theory, ably argued by Center for Global Development (CGD) and others, was that PbR aligns incentives in developing country governments with development outcomes, and encourages innovation, since it does not specify how to, for example, reduce maternal mortality, merely rewards governments when they achieve it.

Those arguments have certainly persuaded a bunch of donors. The UK government (pdf) says that this “new form of financing that makes payments contingent on the independent verification of results ... is a cross government reform priority”. The UK’s department for international development (DfID) called its 2014 PbR strategy Sharpening Incentives to Perform (pdf) and promised to make it “a major part of the way DfID works in future”. David Cameron, the British prime minister, waxes lyrical on the topic.

But I seem to be coming up against a long list of potential problems with PbR. Let’s start with Paul Clist and Stefan Dercon: 12 Principles for PbR in International Development (pdf), who set out a series of situations in which PbR is either unsuitable or likely to backfire. For example if results cannot be unambiguously measured, lawyers are going to have a field day when a donor tries to refuse payment by arguing they haven’t been achieved. They also make the point that PbR makes no sense if the recipient government already wants to achieve a certain goal – then you should just give them the money up front and let them get on with it.

Quote of the week: Angus Deaton

Sina Odugbemi's picture

Angus Deaton at a press conference at the Royal Swedish Academy of Sciences"Politics is a danger to good data; but without politics data are unlikely to be good, or at least not for long."

- Angus Deaton, a British-American economist. In 2015, he was awarded the Nobel Memorial Prize in Economic Sciences for his analysis of consumption, poverty, and welfare. The Nobel Prize website writes, "To design economic policy that promotes welfare and reduces poverty, we must first understand individual consumption choices. More than anyone else, Angus Deaton has enhanced this understanding. By linking detailed individual choices and aggregate outcomes, his research has helped transform the fields of microeconomics, macroeconomics, and development economics."

Blog post of the month: How an award winning elementary school teacher is solving environmental equations using the bicycle

Leszek J. Sibilski's picture

Each month People, Spaces, Deliberation shares the blog post that generated the most interest and discussion. In April 2016, the featured blog post is "How an award winning elementary school teacher is solving environmental equations using the bicycle" by Leszek Sibilski.

“It is the supreme art of the teacher to awaken joy in creative expression and knowledge.” - Albert Einstein
 
When I wrote, “How the bicycle can drive green development on planet Earth” last year in March 2015, my hope was to raise awareness and encourage a few bicycle enthusiasts to further promote the use of the most efficient tool ever designed by the human mind and hand. In my wildest dreams, I never imagined that this blog would inspire an environmental education teacher who teaches grades K-5, Jenna Shea Mobley, from Springdale Park Elementary School in Atlanta to use the material presented in the blog as the impetus for her project that went on to receive the 2015 Presidential Innovation Award for Environmental Educators!
 
In her interdisciplinary curriculum design she combined lessons from science and math to help students focus on the effects of pollution and the human footprint on the environment. Math allowed her students to use multiplication and division to solve word problems and create models to form equations that represented the problem. I must admit, as a teacher, I like to dream big from time to time, but I would have never dreamt of integrating math, science and a pinch of social science into lessons that used the bicycle for children in third grade.
 
Ms. Mobley’s curriculum also included a component that encouraged social action.  Her students were encouraged to write letters to Atlanta’s Mayor Kasim Reed, asking him to reduce air pollution around Atlanta.

Information is power: Silvio Waisbord on how digital technology changes the public sphere and notions of privacy

Roxanne Bauer's picture
How do digital media affect traditional theories of the “public sphere” and power? Are we living in a modern-day panopticon?

The notion of the “public sphere” is useful worldwide to consider how citizens can and do articulate demands to the market or to states. The public sphere is generally conceived as a place (figurative or literal) in which citizens can share information, debate issues and opinions, and restrain the interests of the powerful elite. This space is critical to the formation of public will and the transmission of it to official authorities.

In contrast, the Panopticon is a design for a prison or jail which allows watchmen to observe all inmates at all times without the inmates knowing whether they are being observed or not.  The idea has been used to discuss online privacy, as individuals are often unaware of how governments and companies collect and use the information they gather about them online.  Moreover, the revelation that governments and companies work together to “spy” on citizens, as revealed by Edward Snowden revived the concern that a modern-day panopticon might be possible.   

But these concepts raise another important question: How can the public sphere, which aims to limit excess power, continue to function if the state is monitoring citizen activity?  Much of the information that is collected and tracked online is willingly shared by individuals as they search the internet, use mobile apps, and contact friends and family. This activity is vital to the future of a public sphere around the world, but it also allows governments and companies to intrude in our private lives.

Silvio Waisbord explores these two evergreen, yet very immediate concerns. He argues that while digital technologies have improved the capacities of states and companies to track human activity, digital media can also be used for democratic purposes. 
 
The modern public sphere vs. The online panopticon

Weekly wire: The global forum

Roxanne Bauer's picture
World of NewsThese are some of the views and reports relevant to our readers that caught our attention this week.
 

The World Press Freedom Index
Reporters Without Borders
Published every year since 2002 by Reporters Without Borders (RSF), the World Press Freedom Index is an important advocacy tool based on the principle of emulation between states. Because it is well known, its influence over governments is growing. Many heads of state and government fear its annual publication. The Index is a point of reference that is quoted by media throughout the world and is used by diplomats and international entities such as the United Nations and the World Bank. The Index ranks 180 countries according to the level of freedom available to journalists. It is a snapshot of the media freedom situation based on an evaluation of pluralism, independence of the media, quality of legislative framework and safety of journalists in each country. It does not rank public policies even if governments obviously have a major impact on their country’s ranking. Nor is it an indicator of the quality of journalism in each country.

Non-Western Ideas for Democratic Renewal
Carnegie’s Rising Democracies Network
It is commonly asserted that Western liberal democracy is losing credibility and that the international community must be more open to tolerating, and even encouraging, non-Western political models in developing and rising powers. Calls for non-Western forms of democracy have been around for many years but are now becoming louder and more ubiquitous. This trend can be expected to deepen as an integral element of the emerging post-Western world order.  The desire of people outside the West to contribute new ideas to democratic regeneration and to feel stronger local ownership over democracy is healthy. More needs to be done to nurture a wider variation of democratic processes and practices. 

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