By Robert Wenzel
I hope Uber realizes that someone has the long knives out for the firm.
The latest attack on the firm comes via The New York Times in a piece titled How Uber Uses Psychological Tricks to Push Its Drivers’ Buttons.
The article begins this way:
The secretive ride-hailing giant Uber rarely discusses internal matters in public. But in March, facing crises on multiple fronts, top officials convened a call for reporters to insist that Uber was changing its culture and would no longer tolerate “brilliant jerks.”The piece then goes on to reveal in breathless fashion:
Notably, the company also announced that it would fix its troubled relationship with drivers, who have complained for years about falling pay and arbitrary treatment.
“We’ve underinvested in the driver experience,” a senior official said. “We are now re-examining everything we do in order to rebuild that love.”
And yet even as Uber talks up its determination to treat drivers more humanely, it is engaged in an extraordinary behind-the-scenes experiment in behavioral science to manipulate them in the service of its corporate growth — an effort whose dimensions became evident in interviews with several dozen current and former Uber officials, drivers and social scientists, as well as a review of behavioral research.
Uber helps solve this fundamental problem by using psychological inducements and other techniques unearthed by social science to influence when, where and how long drivers work. It’s a quest for a perfectly efficient system: a balance between rider demand and driver supply at the lowest cost to passengers and the company.Well, blow me down. It is as if The New York Times has just discovered behavioral economics, which by the way is as different from economics as is home economics.
Employing hundreds of social scientists and data scientists, Uber has experimented with video game techniques, graphics and noncash rewards of little value that can prod drivers into working longer and harder — and sometimes at hours and locations that are less lucrative for them.
Grocery stores for decades have been using BE by putting impulse items near cash registers. So have real estate agents (Get those home baked cookies out during an open house) and just about every other business, including, I might add The New York Times when it attempts to hook subscribers with trial subscriptions.
But when these type of techniques are used by Uber, "it's an extraordinary behind-the-scenes experiment in behavioral science to manipulate" drivers, according to The Times.
It should be noted that the article never even mentions the number of cash incentives that Uber offers drivers. Hey, cash incentive manipulations? Manipulate me more.
I ride Uber often enough to get some sense for what drivers think----especially since I ask them. I don't think I have ever come across an unhappy Uber driver. And this makes sense since if a driver was unhappy, he would quit and do something else.
What is most interesting though is that drivers all understand the cash incentives and BE methods that Uber uses and they all have some sort of specific plan to structure what is offered for their own lifestyle. Uber really provides very flexible options.for drivers and I have heard some pretty clever structures that drivers have designed for themselves to fit their own lifestyle and income desires.
The distorted focus of the New York Times piece has to be considered fake news. Uber doesn't employ any techniques that haven't been around for decades.
BE simply recognizes that humans are, well, human. And Uber does the same. It is, for sure, a lot better option than the central planning, rigid rules of Taxi and Limousine Commissions.
Once again we see The Times support the central planning establishment against innovators and creators. That's a dying, cram it down readers' throats, behavioral model that is not going to work in the internet age,
Robert Wenzel is Editor & Publisher of EconomicPolicyJournal.com and Target Liberty. He also writes EPJ Daily Alert and is author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics, on LinkedIn and Facebook. The Robert Wenzel podcast is on iphone and stitcher.