Wednesday, December 17, 2014

Why clueless people hate Uber's surge pricing

Uber's surge pricing is awesome. It's a well-executed feature that makes the product better.

And yet... tons of people irrationally hate it!

I've decided to analyze what's happening in people's brains that causes them to express such a wrong opinion about surge pricing.

It's actually very simple:

People who hate Uber's surge pricing haven't come to terms with the fact that it's impossible for Uber to charge the normal fare and still get them a ride right now.

That's all there is to it! Think about it...

  • The surge-haters get that nice houses cost more than average houses, because they intuitively understand that there would be no incentive to build nice houses, and no way to get rich and spend your money on a nice house, unless nice houses cost more.

  • The surge-haters get that last-minute flights cost more, because they intuitively understand that the plane has a finite supply of seats, so when it's two days before the flight, the seats have to be either high-priced or sold out.

What the surge-haters *don't* get is that the supply of Uber drivers is also limited. Every bit as limited as nice houses or seats on a flight.

To get inside a surge-hater's head, imagine how you'd feel if you went to the iTunes Music Store and saw a message that surge pricing is in effect for their most popular songs:
You'd be furious!

You'd be right to be furious, because surge pricing in the iTunes Music Store couldn't be anything other than a way for Apple to exploit their customers. We know this because:
  1. If Apple keeps the price at $1.29 for every song download, they have no problem running their servers and supplying enough copies to meet demand for even their most popular songs.

  2. Since the marginal cost of a song download is tiny and independent of its popularity, we can reasonably expect free-market competition to drive down the price of every song in every music store. Surge pricing in iTunes would be evidence that Apple's song-revenue model works differently from an idealized model of free-market capitalism with rational consumers, which is an economist's precise way of saying that Apple is exploiting their customers.
A surge-hater subconsciously thinks that Uber's drivers are like Apple's music servers, and rides are a limitless free-flowing resource like song downloads. So of course they're gonna be furious when Uber "exploits" them by jacking up the price of a ride!

Surge-haters have an iTunes-like mental model of Uber's supply capacity. They never learned Econ 101, and apparently they also never learned from their firsthand experiences hailing snailcabs. They selectively remember that snailcabs have a fixed rate, but selectively forget that it can take an hour to get a snailcab when demand is high.

Imagine you call up Yellow Cab for a ~$20 ride, and they tell you the driver will come in an hour. If you're like most people, you probably think it's worth throwing down an extra $10 to cut your wait time from 60 minutes down to 5 minutes. Guess what? That's surge pricing. This is just a typical, totally average, totally reasonable surge pricing scenario.

The iTunes analogy is a satisfying explanation of how so many surge-haters came to hold their wrong opinions. But I'm convinced that if the surge-haters learned Econ 101, they'd completely reverse their position. Because every surge-hater argument I've ever heard has zero validity.

Surge pricing has a lot of haters, but it's awesome. Thanks for moving us forward, Uber.

Thursday, June 21, 2012

Go to college, or eat unlimited meat?

Think of someone you know who just graduated from college. Chances are, they're still hunting hopelessly for an "entry-level" job. Well, you know what would make their job search a lot easier, and land them a job that's much better than entry-level? Taking four years of their life to build job skills.

It's a shame that most people only begin to build job skills after college. They should have been building job skills instead of going to college. 

College isn't worthless. (You'll learn a few things, make a few friends, and get a piece of paper that will make your entry-level job search a little less hopeless.) College is just a bad way to spend four years of your life.

And that's why I'm introducing the All-Meat Lunch for College Avoiders.

The All-Meat Lunch for College Avoiders

If you are of college age, have been accepted to a state or private college, and do one of the following:
  • Decide not to go college
  • Drop out of college
  • Delay college by at least 1 year
I will take you to lunch at Espetus Churrasceria in San Mateo.

Espetus Churrasceria is a high-end Brazilian BBQ restaurant with great food, atmosphere and service. They have an all-you-can-eat lunch with seven types of steak. So ask yourself, do you want to go to college, or eat unlimited meat?

I am guaranteeing the AMLCA for the first 10 college avoiders to claim it. After that, I might stop because of time and money limitations.

To claim this offer, email me ( and start your subject line with "[AMLCA]".

Wednesday, November 23, 2011

3 Reasons to Write Plainly

My friend showed me an essay he wrote for his college application, and I thought it sounded like flowery BS. So this is what I emailed him.


You should write more plainly for three reasons:

  1. People have bad reading comprehension. People read things and "get the gist" - but it's a pathetically vague gist.

    (Readers have no idea how bad their understanding is. They'll think they've understood something they've read, but fail to answer a simple test question about it.)

  2. Readers get bored easily. The more bored they get, the more they skim, and the less they understand.

    If you want to be understood, don't wrap your message in a bouquet of flowery words. They won't unwrap it, they'll ignore it.

  3. It's already hard enough to get people to understand your concepts.

    Only a few things are easy for everyone to think about: Concrete statements about people, animals, food, war, sex, morality, personality, games, and landscapes. Almost every other concrete thing, and almost every abstract thing, is hard to think about.

    So when you're writing about easy things like sex, you can say fancy things like "I am the east, and Juliet is the sun."

    And when you're writing about hard things like the theory of relativity, you have to say plain things like "Mass dents spacetime the way a bowling ball would dent a bedsheet."

    Most things you'll write about are like the theory of relativity, and not like sex.
So don't write a hard slab of beef jerky that your readers have to chomp on with all their might.

Process your ideas into Gerber weenies.

Friday, February 25, 2011

You can have as much as you want

You like M&Ms, right? So consider this fascinating state of affairs: You can have as many M&Ms as you want.

The fascinating part isn't that you can have nice things -- it's that for some nice things, you can have as much as you want. You can keep eating M&Ms until you completely extinguish your desire to eat more M&Ms, and eat more M&Ms the instant your hunger is rekindled.

If you want to appreciate the luxury of modern life, forget about how awesome our airplanes and cell phones are. Instead, just focus on all the luxuries that are available and affordable to you in unlimited quantities.

  • You can eat as many calories as you want.
  • You can eat as many different kinds of foods as you want.
  • You can have as many pillows and cushions as you want.
  • You can read as many books as you want.
  • You can watch as many movies as you want.
  • You can watch as much porn as you want.
  • You can listen to as many varieties of music as you want.
  • You can take a shower for as long as you want.
  • You can drink as much of any beverage as you want.
  • You can get as drunk as you want.
  • You can make your house as hot or cold as you want.
  • You can light your house as brightly as you want.
  • You can plug in as many electrical appliances as you want.
  • You can drive to as many places as you want.
  • You can learn as many skills as you want.
  • You can talk with as many different people as you want.
If you want to know what the future will be like, just think of everything you like, and imagine having as much as you want!

Thursday, February 17, 2011

Searle's Chinese Room: Slow Motion Intelligence

Imagine if the only books ever written were children's books. People would think books in general were a joke. I think the situation with computers and algorithms today is similar: people don't understand the ridiculous potential power of an algorithm because they only have experience with the "children's algorithms" that are running on their PC today.

Take John Searle's famous Chinese room thought experiment, which goes like this:
A man who doesn't speak Chinese is alone in a room with a big book of rules. The rule book gives detailed procedures for how to write a response in Chinese to any question written in Chinese.

An interlocutor standing outside the room writes a question in Chinese on a strip of paper and slips it under the door. To the man inside, the paper is full of meaningless squiggles. But by painstakingly following the syntactic rules in the rule book, he is able to put together a string of Chinese characters that reply to the interlocutor in perfect Chinese.

Searle claims it's obvious that nothing in the room has a "real understanding" of Chinese, neither the man nor the book. Therefore Searle concludes that "real understanding" is not something a computer could ever have, since a computer is just a rule-following system like the man and the book in the Chinese room.

Searle's Chinese room is a great thought experiment, but it's ultimately a non-insight. I just don't buy that nothing in the room has a "real understanding" of Chinese. Want to know what really understands Chinese? It's quite simply the "rule book".

You have to realize that the "rule book" is not a "rule children's book". You can be sure it has a lot more pages than any actual book could have. Maybe it doesn't have as many pages as a human has neurons (100 billion), but it could easily be a million-pager like the code for Microsoft Word.

And you can be sure the person in the room would be flipping among the pages of instructions a lot slower then the firing rate of neurons. Considering that brains have billions of neurons all firing up to 100 times each second, we're looking at a trillion-fold speed difference between these two language-processing systems.

If you watched an actual Chinese speaker with their brain slowed by a factor of a trillion, you'd see slow and soulless neuron-level computation. When you compare that to watching a man flipping around in a rule book, the Chinese room doesn't necessarily seem like the more mechanical system.

Both systems get their soul back when you zoom out. Imagine zooming out on the Chinese room enough that you can watch a million book-flipping years pass while the interlocutor is waiting for a yes-or-no answer. If you watch that process on fast-forward, you'll see a chamber full of incredibly complex and inscrutable machinery, which is exactly what a Chinese speaker's head is.

The Chinese room is supposed to persuade you that a system made out of mere pages can't "really understand" language. But it doesn't address why a system made out of mere neurons shouldn't have the same limitation. To me it seems clear that the two systems have similar architectures and possess similar powers of understanding.

Sunday, August 22, 2010

Are You 1 in 1,000,000?

Basically, I want to make some viral thing before I die.

Saturday, July 10, 2010

Be Impressed

When would you say this to someone?
"Thanks for doing such a great job on this project. I'm happy you're taking on more and more responsibility."
You probably think you'd say this when someone has impressed you with their performance. But what if the person's performance is merely borderline acceptable, and you give some constructive criticism, and yet you still say it? Then you've performed a Jedi mind trick.

To the human subconscious, a statement like that is a powerful command. And I bet you know exactly what I'm talking about, now that I've brought it up: When you tell people they're making a positive impression on you, they automatically turn up the behavior that caused it.

If you want to get more out of the people around you, you need to start the virtuous cycle by noticing when their effect on you is even the slightest bit more positive than usual, and acting pleased.

And if there's someone who never pleases you, maybe part of the reason is that your consistently cold reactions to that person have flattened the reinforcement gradient that would normally amplify their positive behaviors over time.

Be appreciative whenever anyone behaves in what you judge to be the top 20% of their range. And if you want your reaction to cause an even bigger shift in their motivational dynamic, then kick it up a notch: be impressed.