<story><title>Shipt’s algorithm squeezed gig workers, who fought back</title><url>https://spectrum.ieee.org/shipt</url></story><parent_chain><item><author>robocat</author><text>&amp;gt; They can charge each customer exactly the maximum amount possible&lt;p&gt;The company captures the consumer surplus. Generally currently we often get way more value than we pay for. We hate having that surplus taken away from us and we hate being charged what something is worth to us.&lt;p&gt;Two questions: How do we fight back? Is it unfair that we pay the amount that something is worth to us individually?&lt;p&gt;Currently think of any service you use and the value you get from it. What happens when Apple or Google start to try and capture the consumer surplus we receive?</text></item><item><author>russdill</author><text>We are entering an era where corporations have perfect data. They can charge each customer exactly the maximum amount possible, and pay each worker the exact minimum amount possible</text></item><item><author>theptip</author><text>A clear case of adverse selection in the old pricing model.&lt;p&gt;From a game-theoretic perspective in a gig marketplace you don’t want jobs that are strictly better, else sophisticated market participants (workers) will select the best ones leaving chaff - and a worse experience - for the less sophisticated participants.&lt;p&gt;What you are looking for is preference optionality, eg one Uber driver might prefer not to do very long trips, another might prefer it, and you ideally get paid fairly for either.&lt;p&gt;In this case as others have noted, it doesn’t actually sound like an unfair change. Perhaps communications could have been better though.</text></item></parent_chain><comment><author>blackbear_</author><text>If every product&amp;#x2F;service has exactly zero consumer surplus, then consumers won&amp;#x27;t have any reason to prefer product&amp;#x2F;service A at price p over product&amp;#x2F;service B at price q, or even over not spending money at all. This will kill innovation, since business competition is based on providing a higher consumer surplus (better quality for the same amount of money, or same quality for less money). This is a clear market failure, therefore this kind of discriminatory pricing should be made illegal.</text></comment>
<story><title>Shipt’s algorithm squeezed gig workers, who fought back</title><url>https://spectrum.ieee.org/shipt</url></story><parent_chain><item><author>robocat</author><text>&amp;gt; They can charge each customer exactly the maximum amount possible&lt;p&gt;The company captures the consumer surplus. Generally currently we often get way more value than we pay for. We hate having that surplus taken away from us and we hate being charged what something is worth to us.&lt;p&gt;Two questions: How do we fight back? Is it unfair that we pay the amount that something is worth to us individually?&lt;p&gt;Currently think of any service you use and the value you get from it. What happens when Apple or Google start to try and capture the consumer surplus we receive?</text></item><item><author>russdill</author><text>We are entering an era where corporations have perfect data. They can charge each customer exactly the maximum amount possible, and pay each worker the exact minimum amount possible</text></item><item><author>theptip</author><text>A clear case of adverse selection in the old pricing model.&lt;p&gt;From a game-theoretic perspective in a gig marketplace you don’t want jobs that are strictly better, else sophisticated market participants (workers) will select the best ones leaving chaff - and a worse experience - for the less sophisticated participants.&lt;p&gt;What you are looking for is preference optionality, eg one Uber driver might prefer not to do very long trips, another might prefer it, and you ideally get paid fairly for either.&lt;p&gt;In this case as others have noted, it doesn’t actually sound like an unfair change. Perhaps communications could have been better though.</text></item></parent_chain><comment><author>simoncion</author><text>&amp;gt; [W]e hate being charged what something is worth to us.&lt;p&gt;I&amp;#x27;ll rephrase this in a way that&amp;#x27;s more straightforward and clear:&lt;p&gt;&amp;gt; We hate being charged every penny we could conceivably pay for a given thing.&lt;p&gt;In part because many ordinary folks believe that a fair deal is for businesses to cover the cost of R&amp;amp;D for the thing and the cost of getting it to us, as well as a reasonable profit to cover both expected future support and future R&amp;amp;D for improvements and&amp;#x2F;or new products.&lt;p&gt;And also in part because most folks can figure out what&amp;#x27;s likely to happen when &lt;i&gt;every&lt;/i&gt; company out there demands that we pay them not just enough to cover the above, but every penny we could conceivably pay for the thing. (To spell it out: One suddenly has to make very hard choices about what one does without... likely for an uncomfortably long time. [0])&lt;p&gt;[0] If you think that this wouldn&amp;#x27;t happen, or that if it did it would be over in a matter of weeks (rather than years) remember the aphorism &amp;quot;The market can stay irrational longer than you can stay solvent.&amp;quot;.</text></comment>