May 19, 2017

Uber's latest economics trick: Willingness to pay

Automobile Italia / Flickr cc

A year after Uber introduced "upfront pricing"—setting the price of a ride on the outset—it's now beginning to charge more for certain routes in an effort to juice up its earnings, as Bloomberg reported. The company says it uses the extra money to subsidize other rides, and will begin to show drivers the difference between what they're earning and what the rider paid.

It's officially rolling out the changes in the 14 markets where it offers UberPool, its carpooling option.

Old-fashioned economics: What Uber's doing is pure economics—price discrimination to charge riders it describes as time-sensitive (those paying more for a private UberX ride) to subsidize price-sensitive riders (usually those taking the cheaper UberPool option). The former group, according to Uber, is willing to pay more for a particular route at a particular time than it has been paying, so Uber will now charge these riders what it believes is that maximum price. An Uber spokesperson assured Axios that pricing has nothing to do with a rider's perceived level of income, past rides, or any individual characteristics.

Uber's love of classic economic principles is nothing new—"surge pricing," its practice of hiking prices in times of higher demand, is textbook supply-and-demand.

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Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 3 a.m. ET: 665,164 — Total deaths: 30,852 — Total recoveries: 140,225.
  2. U.S.: Leads the world in cases. Total confirmed cases as of 3 a.m. ET: 124,665 — Total deaths: 2,191 — Total recoveries: 1,095.
  3. Federal government latest: President Trump announces new travel advisories for New York, New Jersey and Connecticut, but rules out quarantine enforcement. Per the CDC, residents of those states must now "refrain from non-essential domestic travel for 14 days," with the exception of critical infrastructure industry workers.
  4. State updates: Alaska is latest state to issue a stay-at-home order — New York is trying to nearly triple its hospital capacity in less than a month and has moved its presidential primary to June 23. Some Midwestern swing voters who backed Trump's handling of the virus less than two weeks ago are balking at his call for the U.S. to be "opened up" by Easter.
  5. World updates: In Spain, over 1,400 people were confirmed dead between Thursday to Saturday.
  6. 🚀 Space updates: OneWeb filed for bankruptcy amid the novel coronavirus pandemic.
  7. Hollywood: Tom Hanks and Rita Wilson have returned to U.S. after being treated for coronavirus.
  8. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk
  9. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Coronavirus updates: Global death toll tops 30,000

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens and confirmed plus presumptive cases from the CDC

The novel coronavirus has now killed more than 30,000 people around the world — with Italy reporting over 10,000 deaths, per Johns Hopkins data.

The big picture: The number of deaths from COVID-19 in the U.S. surpassed 2,000 on Saturday. The United States leads the world in confirmed coronavirus infections — more than 124,000 by early Sunday. The number of those recovered from the virus in the U.S. passed the 1,000-mark on Saturday evening.

Go deeperArrowUpdated 3 hours ago - Health

Gilead expands access to experimental coronavirus drug in emergency cases

Photo: Olivier Douliery/AFP via Getty Images

Gilead Sciences CEO Daniel O’Day said in an open letter Saturday the company is expanding access to its experimental anti-coronavirus drug remdesivir to include severely ill COVID-19 patients.

The big pig picture: President Trump has called the antiviral drug "promising," but the results of six clinical trials on this investigational medicine are still being conducted, so its effectiveness the treatment of the novel coronavirus has yet to be proved. The World Health Organization is involved in the tests.

Go deeperArrow3 hours ago - Health