The age of distributed truth

Apparently, for years, Nora Ephron, who was once married to Carl Bernstein, would openly tell people that Deep Throat was FBI Associate Director Mark Felt. It wasn't that Bernstein told her; she deduced it from clues and shared it with many people around her. It seems no one believed her, so when Felt finally came clean in 2005 it was treated as a big reveal.

Explosive truths that hide in plain sight are especially unusual in this age of the internet, especially with outlets like Deadspin so eager to share every rumor. How is it that incriminating stories can be floating out there for years and not spread like viral memes when headline writers everywhere are weaponizing even the most mundane of news? 

For years, many people in Hollywood knew that Bill Cosby was a sexual criminal, yet it wasn't until 2014 when Hannibal Buress called Bill Cosby a rapist during a stand-up set that suddenly everything began to turn. I've written before that how a message is encoded really matters. Buress took a dark story and turned it into viral video form, and no matter how many hung juries will let Cosby off the hook, his career is effectively over, his reputation forever tarnished beyond repair.

"I've done this bit on stage and people think I'm making it up.... when you leave here, Google 'Bill Cosby rape.' That sh** has more results than 'Hannibal Buress.'"

[I just did, and actually "Hannibal Buress" has now passed "Bill Cosby rape" in Google results. Glass half full?]

Until a week ago, I had never heard of Justin Caldbeck or Binary Capital. In the wake of the revelation that Caldbeck had been sexually harassing women coming to his firm for funding, suddenly multiple stories came to the forefront. Apparently Caldbeck had been well known for his perverse behavior among a subset of people in the tech community. Now, everyone knows him thanks to a story broken by Reed Albergotti in The Information. It's sometimes said that all PR is good PR, but like most such sayings, the qualifier is "except when it isn't."

With Caldbeck having resigned, maybe to never work in this town again, and Binary Capital likely headed for extinction, its brand now toxic, it's worth examining what feels like a distinctly modern ritual, the tipping point when highly localized common knowledge goes wide. It has happened over and over in this internet age, and it's going to happen again.

***

In Rational Ritual, the concise, readable, and seminal text on the subject of common knowledge, it is described this way:

...knowledge of the message is not enough; what is also required is knowledge of others’ knowledge, knowledge of others’ knowledge of others’ knowledge, and so on — that is, “common knowledge.”
 

Before Justin Caldbeck's behavior might have best been described as mutual knowledge: something that lots of people know, but after the story broke in the Information, and once Caldbeck and Binary Capital finally finally acknowledged the issue, his disturbing pattern or harassment became common knowledge, something that not only does everyone in tech know, they also now know that everyone else in tech knows.

In sharing their news on the record with the Information, the brave women Niniane Wang, Susan Ho, and Leiti Hsu created a new world in which you cannot pretend to be ignorant of Caldbeck's behavior. Everyone around him, from his investors to his partners and coworkers to the tech community at large had to choose how to handle the news. Feigning ignorance now is to be explicitly complicit.

Rational Ritual focuses on the role of public ceremony and ritual in creating common knowledge among the public; “rituals and ceremonies are not just “texts” but also publishing processes.”

What we've seen recently in Silicon Valley is the power of the written word to serve as its own form of ritual to create common knowledge in the community. Albergotti's story was one example, but an even more salient example was Susan Fowler's blog post "Reflecting On One Very, Very Strange Year at Uber."

There had been plenty of rumors and stories about the toxic Uber culture before, but many were about the win at all costs nature of the company, and that will always be spun as the inevitable side effect of dogged entrepreneurs doing what's necessary to break through in a market with privileged incumbents and regulatory capture. But as soon as Fowler hit publish on her blog post, as as soon as the story went viral among the tech press, then the mainstream press, spreading around Twitter with the what seemed to approach the speed of light, the entire tech community had a new source of common knowledge with which to grapple. Uber was a company that, from the top on down, forgave sexual harassment and discrimination.

As Kara Swisher notes of Fowler's post:

But post-Fowler, you could not ignore it, because she pulled off what poet Louise Gluck wrote about in her poem, “Circe’s Power”: “I never turned anyone into a pig. Some people are pigs; I make them look like pigs.”
 
Which is to say that Fowler did everyone in tech a public service by doing nothing more than making pigs look like pigs.
 

Fowler wasn't just brave, she was also incredibly wise. With every right to take an indignant tone, she instead maintains a measured, reportorial tone from the start, beginning with the very demure title. Can you imagine what any modern headline writer would've titled her post? Thank god she was able to retain control of her tone and voice from title on down.

In calmly reciting point after point with heroic, reserved prose, she checkmated the company, doing something that countless angry screeds from tech journalists could not do, all of those opening themselves to accusations of partisan naysaying. Fowler simply told her story, and told it straight.

It doesn't take long. In her third paragraph, she writes:

After the first couple of weeks of training, I chose to join the team that worked on my area of expertise, and this is where things started getting weird. On my first official day rotating on the team, my new manager sent me a string of messages over company chat. He was in an open relationship, he said, and his girlfriend was having an easy time finding new partners but he wasn't. He was trying to stay out of trouble at work, he said, but he couldn't help getting in trouble, because he was looking for women to have sex with. It was clear that he was trying to get me to have sex with him, and it was so clearly out of line that I immediately took screenshots of these chat messages and reported him to HR.
 

"Things started getting weird." That's one way to put it, but think of how many other ways she could have said it. It almost sounds naive, but it's clear she knows what's happening, and how in this high stakes game of poker, she has to be the coolest player at the table, lest she, like so many women before her, be labeled some hysteric. Her post is a masterpiece of tone and rhetorical control, and it had to be. No resorting to snark or irony or any number of tricks of the clever; she bore her own witness, and no better witness could an attorney have imagined.

It's also worth noting that she did what every employee training course I've ever taken says you should do, which is to report such incidents to HR. I've met many a kind HR person in my career, but let's be honest about what bad advice this is for employees. It's not just that Uber's HR department let Fowler down; in every company I've ever been at, HR reports into the CEO, and their job is to protect the company. I hope my readers will provide me with examples of HR protecting employee's interests in such cases, but from what I've seen and read, the moment you report an incident to HR they start building a dossier on you and a case to defend the company in court. Their work will be in that courtroom with you, but it will be on the desk of the company's attorneys, not yours. As many an employment lawyer has told me, before you talk to HR, you should talk to one of them. Until we have some independent, ombudsman-like HR group looking out for employees in the tech world, that would be my advice, too.

HR failed Fowler, but she took matters into her own hand. Her post said, “This happened. This happened. Look on the works of these mighty, and despair.”

Those in power are not stupid. They know the power of common knowledge in solving the coordination problem among those who'd oppose them. The first thing oppressive regimes facing rebels at the gates will do is cut off public communication channels like television, radio, and social media. If the opposition cannot communicate with each other, they do not know how many others will stand with them if they march on those in power, weakening their resolve.

The tech equivalent is the non-disparagement agreement. Stitch Fix founder Katrina Lake had reported to Lightspeed Venture Partners years ago that she'd been harassed by Caldbeck, and in response the VC firm had Lake sign a non-disparagement agreement, a copy of which is now online. Lightspeed could have blocked a Benchmark investment in her company, and so she signed it.

While such agreements can cut both ways, in almost every case, preserving information asymmetry is a tactic for those in power to stay there. There's a reason that airlines have rules trying to prohibit passengers from filming personnel and other passengers on flights.

I have no idea whether Fowler had to sign a non-disparagement clause when she joined Uber, and it may be that United Airlines policies prohibited the type of video that passengers shot of security guards dragging an elderly man off a flight like a sack of produce, but even if so, the history of the world is testament that justice sometimes requires a bit of civil disobedience. Or, as the kids these days call it, a bit of disruption.

***

In many stories that have been written since the original story about Justin Caldbeck broke, it seems that his behavior wasn't exactly a well-kept secret, but the fact that it hadn't seemed to have hurt him until last week is another reason Wang, Ho, and Hsu had to show real courage in going on the record. When such behavior seems to be generally forgiven among a community, one can't be certain of what the punishment for speaking out will be. It's not just the structural leverage of VC's over entrepreneurs, it's the chilling sense of feeling like an outsider trapped in enemy territory, playing a game that has been rigged against you, only you're not sure who is in on it. If you start a war, from which there is no return, who will stand with you?

This is the type of coordination problem that common knowledge is supposed to solve, but one only need study the historical treatment of women who speak out against those who harass them on Twitter or those who've sexually assaulted them to understand why so many are reluctant to do so. The personal cost, and victory is far from assured.

Ask the black community, who have actual video of police gunning them down for no reason other than prejudicial fear, how that's worked out with them. I wrote that in the wake of the Philando Castile case that soon black drivers would have dash cams turned in towards their vehicles, recording every traffic stop in full. Only a short while later the actual dash cam footage from the police vehicle involved in the Castile case was released publicly. Combined with the Facebook Live video, the evidence seemed as strong as it could be.

We need look no further than the highest office in the land to see that common knowledge often isn't enough. When the audio of Billy Bush and Donald Trump laughing it up on the bus broke, I thought for sure that would be the incident to sink him. For once, Trump had been caught on tape, when the press and public weren't in the room to serve as an explicit audience. The tape could be entered into evidence as common knowledge for the public. Then there was video of Trump mocking a disabled reporter.

And on and on and on. Trump has laid so much rope by which the public could have hung him that his feet ended up back on the ground. He is the troll who thumbs his nose at the two intellectually neutered political parties, realizing they have neither the will nor the ideas to do anything as he and his family laugh their way to the bank. In literature, the court jester is often the wisest fool in the room, but sometimes an idiot is just an idiot. If the gloves do not fit, you must acquit. Who will ever forget? What's depressing about Trump is how he seems to be an exemplar of the variant: the gloves do fit, but you can't do shit.

Still, that Trump's personal failings could be common knowledge and yet not disqualify him from consideration from the Presidency is not an indictment of common knowledge but instead speaks to just how dire the economic situation is for too many in this country. Listen to most Trump supporters and they'll acknowledge his faults. That fact that the Caldbeck case sunk a VC firm and the Susan Fowler post kicked one of the most powerful companies in tech into choppy water give hope that internet has created a new form of public ritual by which to establish common knowledge of injustice. The pen can be mightier than the sword.

I'm no expert on blockchain technology, but one of its more elegant properties is that the truth, the common knowledge, if you will, is distributed, not owned by any one entity. When the accusations against Caldbeck went public, he and Binary Capital both denied the allegations in the strongest terms.

In the blockchain, computational algorithms ensure that the truth wins out and is irreversible. Like a sort of human blockchain, Niniane Wang, Susan Ho, Leiti Hsu, and three other women came out all at once, in solidarity, backed by the reporting of The Information, and neutered the predictable Caldbeck and Binary Capital denials as the reflexive bullshit that they were. In the public ledger, the word of these women became the truth.

The internet gave everyone a megaphone, and these days that can feel like that Chinese proverb, you know the one. Perhaps the truth was better kept in the hands of a limited set of responsible stewards, but that age of the expert has passed, and that system had its own issues. As every Death Star reminds us each time they're blown up, concentrating power in a small area has its own unique vulnerability.

We live in the age of distributed truth, and it's an environment in which fake news can spread like mold when in viral form. But the same applies to the truth, and if there's one lesson on how to do your part in an age of distributed truth, it's to speak the truth and to support those who do. It may be exhausting work—is it really necessary to point out the emperor is buck naked?—but it's the best we can do for now. In this age, the silent majority is no majority at all.

That's why they call it Gawker

While it is de rigueur among observers of Silicon Valley’s Game of Thrones to dismiss questions of profitability as short-sighted hand-wringing, the detailed documents obtained by Gawker demonstrate conclusively for the first time that Uber has been financing its astronomic growth by taking staggering losses.
 
This unaudited revenue and expense breakdown for 2013 and 2014 shows that, though Uber’s net revenue has grown substantially, the company lost more than $56 million in 2013. By the first half of 2014 alone, that number had leapt to more than $160 million. 
 
Another document, laying out quarterly profits and losses in 2012 and part of 2013, shows the same dynamic: healthy growth in revenue coupled with steadily deepening losses. In 2012, Uber’s losses totaled $20.4 million; from the first quarter of 2012 until mid-2013, quarterly losses more than doubled from $3.5 million to $8.1 million.
 

Juicy get by Gawker on Uber's financials, but the financial analysis is about the quality you'd expect. The original version of the article included this line:

“Net revenue” typically refers to the money you have left after the cost of doing business—profit.
 

Yikes. I give lots of tech journalists grief for not knowing the subjects they're covering, but I'd venture to say most anyone with the a basic finance or econ course under their belts knows the difference between net revenue and profit. This hilariously defiant correction was later added:

Correction: Although net revenue is sometimes used as a synonym for profit, in accounting terms it means simply gross revenue minus the cost of sales. Two sentences that confused this meaning have been removed.
 

If I were an investor, I think I'd be ecstatic to see these internal financials. In a commodity market where the last company standing will be incredibly valuable, Uber is subsidizing a price war that favors the company with the scale advantage (i.e., Uber). Try calling an Uber Pool and compare it to calling a Lyft Line and you'll get a sense of how much thicker the Uber market is, on both the driver and rider side.

The subsidized pricing in a variety of cities are a worthwhile customer acquisition cost for what might be a lifetime rider. The last time I was in Los Angeles, riding Uber all over town was so cheap it fell into the category of no-brainer, and I contemplated not renting a car next time in town. I was in New York City recently and whereas a year ago a lot of Manhattanites still took cabs most of the time, now most of them are Uber converts. Once the introductory rates and subsidies go away, I suspect most of them will still be customers. That's when the profits come.

And yes, someday one of Uber's chief costs, the drivers, may be replaced by driverless cars, adding to their gross margins, and also their profits.

No moral judgments here, just some impressed gawking at Uber's flawless execution. That wouldn't have made for a Gawker-worthy story, but that should've been the headline.

Uber for disembodied companionship

Kashmir Hill worked as an invisible boyfriend/girlfriend for a month. We are already living with one foot in the near future.

With each job, I would see the person’s first name, last initial and hometown; “how we met;” and my own assigned name, age, and which of six personality types they’d given their Invisible. Now I’m adventurous and fun. Now I’m cheerful and outgoing.
 
There were 3 major rules:
1. I was always supposed to be upbeat in my messages.
2. I’m not supposed to break character.
3. No sexting. (Photos are blocked on the service.)
 
I’d get the story of how we met and the last 10 messages we’d exchanged. This setup is designed to create the illusion of continuity; ideally, an Invisible Boyfriend would seem like a steady, stable presence in a user’s life, instead of what it really is: a rotating cast of men and women. And it is both: a woman who works for the service previously told me she prefers playing the role of boyfriend because she knows what a woman wants to hear.
 

Hill probably got paid more for this article than she did for her work as invisible companion.

It’s hard to put a price on love. But Crowdsource did. It’s worth a whopping five cents. That’s how much I got paid to write each of these texts.
 
If I spent an hour answering texts, and took the full five minutes to write each one, I’d be making 60 cents an hour, far below the minimum wage. This is legal because all the workers on the platform are classified as independent contractors rather than employees. “Contributors have a tremendous amount of control over their decisions—for example, when to perform a task, when to complete it, and even if they want to complete it at all,” said Jeffrey H. Newhouse, an employment lawyer at Hirschler Fleischer, by email. “That means the contributor isn’t an employee and, as a result, employee protections like the minimum wage don’t apply.”
 

Not surprising considering the required skill set is the ability to write with decent grammar, that's reasonably commodified.

As with Uber, the laborers already fear displacement by technology like self-driving cars.

I assumed that, when artificial intelligence is good enough, Invisible would just cut the crowdsourced humans out of the equation and use chat bots, which you don’t have to pay per message, instead.
 
No, he said. “Having humans in the flow is the key to the service,” said Tabor. “There are things that only humans can respond to and understand, like inside jokes.”
 

Loneliness continues to be one of the great problems being tackled by technologists. See also: Her, The Diamond Age.

Does surge pricing maximize consumer welfare?

Steve Randy Waldman makes one of the more persuasive arguments against surge pricing (a term which may have existed before Uber—the practice certainly did—but which now seems inextricably intertwined with their brand).

I don’t care all that much about Uber’s “surge pricing” — its practice of increasing its usual fare schedule by multiples during periods of high demand. I do, however, care about the damage done by a kind of idiot dogmatism that hijacks the name “economics”. Uber’s surge pricing may or may not serve Uber’s objectives of profit maximization and world domination. It may or may not increase “consumer welfare”. But it is not unambiguously a good practice, either from the perspective of the firm or as a matter of economic analysis. Its pricing practices impose tradeoffs that must be addressed with reference to actual, on-the-ground circumstances. Among prominent academic economists there may well be a (research-free) consensus that surge pricing promotes consumer welfare (ht Adam Ozimek), but that reflects the crude selection bias of the profession much more than actual analysis of the issue. The dogmatism which has arisen in support of Uber’s surge pricing is quite analogous to the case of urban rent regulation, a domain in which there is incredible heterogeneity across localities and nations, both of circumstance and policy, and a wide range of legitimate values that conflict and must be reconciled. (Here’s an interesting case in the news today, in Spain, ht Matt Yglesias.) Almost as a right of passage, economists drone in every intro course that rent controls are bad. By preventing price signals from working their magicks, they prevent the explosion of real-estate supply that a truly free market would deliver. This is stated as uncontroversial fact even while economists who research and opine prominently on housing policy have endlessly documented that housing supply is not in fact price-elastic in the prosperous cities where rent controls are typically imposed. None of this is to say that rent controls are good or bad, or that non-price barriers to construction are good or bad. These are complex questions involving competing values textured by local circumstance. They deserve bespoke analysis, not pat dogma imposed by distant central planners economics professors.
 
...
 
As in the case of rent control, the stereotyped economist’s case for surge pricing is based on a conjectured elasticity of supply. With higher prices, the reasoning goes, more drivers will hit the road, more customers will be served, and the world will be better off. And that’s a good case, as far as it goes. But it doesn’t go very far, without some empirical analysis. It doesn’t justify Uber’s actual practice of surge pricing, which is far from the transparent auction our stereotyped economist seems to imagine. It doesn’t account for the trade-offs imposed by price-rationing (as opposed to time- or lottery- rationing), both between customers and for the public at large.
 
First, how price elastic is driver supply? If we presume that Uber is a Walrasian auctioneer, a disinterested matchmaker of supply and demand, apparently supply is not very elastic. Uber surges prices by multiples, two, three, even four times “typical” pricing in periods of high demand. That’s extraordinary! If supply were in fact elastic, small increases in price would lead to large increases in supply. The supply-centered case for dynamic pricing is persuasive in direct proportion to actual elasticity of supply. Uber’s behavior suggests that the supply-based case is not so strong. Of course, we cannot make very strong inferences about driver supply from Uber’s behavior, because they are not in fact a disinterested Walrasian auctioneer. When Uber surges, it dramatically raises its own prices and earns a lot more money per ride, whether ride supply increases not at all, or whether it spikes so much that drivers end up competing heavily for riders and suffer long vacancies. As a profit maximizer, Uber’s incentives are to impose surges primarily as a function of demand, and say nice things about supply to con economists and journalists.
 

This is one of the paradoxes of surge pricing. It is supposed to attract more drivers to the road, but if you live in SF as I do and have tried to call an Uber at the end of the workday (say 5-8pm), or on a weekend night, you know that Uber will inevitably be in surge pricing. And yet it still happens every day. If surge pricing worked, you'd expect drivers to learn that those are great times to drive to maximize their earnings, and that as more drivers did so surge pricing would wane as supply matched demand.

Perhaps there are still not enough drivers in total to match these spikes in demand. Or perhaps driver supply isn't as price elastic as claimed.

Or perhaps the cost of maintaining even the normal supply of drivers on a Friday night is just higher. Driving in rush hour in San Francisco isn't exactly pleasant work, and more importantly, drivers want to go out on Friday nights, too. The price to get them on the road may just permanently be higher on that night, like how evening movie tickets cost more than matinee tickets, or dinner costs more than lunch at restaurants even if the food is the same, or how Monday morning flights with Friday evening returns cost more to target business travelers. Completely plausible, but different from the story that ride sharing PR departments continue to put out, which is that surge pricing attracts more drivers until supply matches demand.

If that were the case, from a brand perspective, it would be better to just put those higher rates into effect permanently and call them peak rates and call the pricing at other times off-peak rates. Surge pricing is already a dirty word. If for some reason demand was even higher than normal peak demand, then put in surge pricing, and if for some reason it happened to be lower, you could offer a discount off of peak rates (ebb pricing?) and gain some consumer goodwill.

The other argument for surge pricing is, of course, price rationing. That is, by raising prices, we ensure that the scarce resource of Uber drivers goes to those who most need it.

Unfortunately, the argument for price-rationing (as opposed to lottery-rationing, or queue-rationing) of goods as being welfare-maximizing depends (at the very least) upon a rough equality of wealth so that interpersonal dollar values can stand in for interpersonal welfare comparisons. In an unequal society, price rationing ensures disproportionate access by the rich, even when they value a good or service relatively little. There is no solid case that price-rationing is optimal or even remotely a good idea when dispersion of purchasing power is very large. I’ve written about this, as has Matt Yglesias very recently. Matt Bruenig has two excellent posts relating this point to Uber specifically (as well as another post on ethical claims about Uber’s pricing).
 

The service is still scaling (incredibly), so it may not be fair to judge the validity of the price-rationing argument. However, based on the three times I've seen crazy surge pricing multiples for Uber (I'm talking 8X to 9X, for example during a blizzard in NYC the day after the Super Bowl two years ago), price rationing meant Uber was only available to price-insensitive wealthy folks. Great for maximizing Uber's profits, but not exactly what people claim when they say the market is the best way to allocate scarce resources during times of peak demand, for example an emergency. Unless you want to argue that because the wealthy were willing to pay more, they deserved or needed the service more than poorer folks. Pursue that line and next thing you know, you're dancing with a woman in a mask at your masquerade ball and she's whispering in your ear:

There's a storm coming, Mr. Wayne. You and your friends better batten down the hatches, because when it hits, you're all gonna wonder how you ever thought you could live so large and leave so little for the rest of us.
 

Matt Bruenig explains this with a very clear example:

Suppose that, in a given location, 10 people will normally hail an Uber cab, and 10 drivers will normally be cruising about to accept them. Now suppose that, because of an emergency, the number of people trying to hail a cab shoots to 100 people. In response, Uber jacks up prices very high, which has the effect of bringing 10 additional drivers on to the road. That means there are now 20 drivers (a doubling of supply) and 20 of the 100 people trying to hail an Uber cab succeeds in doing so.
 
Under Econ 101 analysis, you say that there was a welfare increase here. See, there were 20 people who got Uber cabs rather than 10 people. But, as I keep pointing out, this argument is not determinative if we assume the 100 people vying for Uber cabs have unequal economic resources. Further, the more unequal the resources are among those people, the more likely using prices like this actually decreases aggregate utility.
 
To see why, consider these two scenarios:
 
Non-Surge
  • Rider Demand: 100
  • Cab Supply: 10
  • Chance of Getting a Cab: 10% for all 100 riders
Surge
  • Rider Demand: 100
  • Cab Supply: 20
  • Chance of Getting a Cab: 100% for wealthiest 20 riders, 0% for other 80 riders
From a glance, you can immediately see that for the bottom 80 riders, the rational preference should be the Non-Surge. In Non-Surge, their odds of getting a cab are 10%. In Surge, their odds of getting a cab are 0%. Don’t let stupid journalists confuse you on this point.
 

Did more cars hit the road in response to the 8x or 9x surge pricing that snowy night in NYC? Without data from Uber, it's impossible to say. Given that Uber has been under a bit of a public relations siege, at least in the tech press and locally here in the Bay Area, if surge pricing increased supply of drivers in any meaningful manner in times where demand outstrips supply, I would've thought they would've released data proving that point.

This isn't to say I'm not a fan of Uber and other ride-sharing services. I love ride sharing, I use Uber and Lyft all the time. They've undoubtedly produced a great deal of surplus consumer and societal welfare, especially in this time of a heavily subsidized price war for market share. What taxi drivers and the government are doing in Paris to fight off Uber is just one more reason I've fallen deeply out of love with what was once one of my favorite places in the world.

And I don't doubt some of the grumbling about surge pricing is just the usual consumer noise greeting any price increases, however reasonable. It would be more bizarre if consumers didn't complain simply as another signal to suppliers of their preferences.

But the argument that surge pricing always maximizes consumer welfare is a more complex one, and not a premise that should be accepted at face value.

Moments in tech history: surge pricing

According to this site which claims to be able to surface the first tweet on any subject, the first two tweets about Uber surge pricing were these:

The first wonders what surge pricing is, and then the second, coming just five minutes later, complains about it. A succinct and perfect summary of the public reception to surge pricing for the history books.

We live in glorious times, when the time to the inevitable backlash approaches zero.

Happiness hacks

Happiness hacks are appealing as they're usually simple ways to wring more happiness out of life without having to really lose out in other ways. Dan Ariely addresses two common situations in this column in the WSJ:

  • Should you pay to park in a garage or spend time driving around looking for a street spot? 
  • How should you split dinner bills?

In Chinese culture, it's common to fight other diners to pick up the tab for dinner, and Ariely gives some psychological grounding for the logic of doing so.

The third approach, my favorite, is to have one person pay for everyone and to alternate the designated payer with each meal. If you go out to eat with a group relatively regularly, it winds up being a much better solution. Why? (A) Getting a free meal is a special feeling. (B) The person paying for everyone does not suffer as much as his or her friends would if they paid individually. And (C) the person buying may even benefit from the joy of giving.

Even before reading this Ariely column, we'd implemented something like this at work, primarily to minimize the psychic pain of transactional hassles like calculating bills, signing credit card bills, making change, etc.. When we were working out of a house in Menlo Park, we'd all go out to lunch together each day. Instead of splitting every bill, one person would always pick up the tab, and Nick, one of our developers, would snap a photo of the receipt and keep a running tally of who owed who. This made meals more pleasant for all of us. An ancillary benefit is that picking up bills accelerates the forming of tighter bonds between the people sharing the meal. Small financial commitments are a simple gateway drug for higher level covenants.

Another simple hack that some restaurants have put into place is pre-paying for meals. HIgh end restaurants like Next Restaurant (and now Grant Achatz's other restaurant Alinea) charge you for the meal when you score your reservation, often months in advance of the meal itself. This is beneficial for the restaurant since a single cancellation can kill a high end restaurant's margin for the night. But it's also good for the diner. The most unpleasant part of a fine dining meal is getting a staggering bill dropped on your lap while you're still trying to digest dessert. By pulling that pain up ahead so far, the meal can end more pleasantly. You get up with whatever they've given you as a takeaway gift, and often you can't even remember what you paid for the meal in the first place. The sacrifice for the diner is a bit of free choice on the food and beverages, but most fine dining restaurants have a fixed tasting menu anyhow, and choosing the wine is more taxing than empowering for most diners.

Riding with Uber offers a bit of this benefit since they have your credit card on file and you don't have to pay or calculate a tip when you get out of the vehicle. During the journey, there is no visible meter running so you can't stress the ever increasing bill you're due to pay ticking upwards in bright red numbers. The downside is that soon after your ride concludes, you get an email with the bill which often is your last memory of the ride. For all but the ultra wealthy, it's not the ideal way to end that transaction.

I would not be surprised to see Uber implement some type of discount for a pre-pay account where consumers might deposit $50 or some other amount at the start of the month and just deduct from it as you use the service during the month. Offering riders a discount for choosing this option makes sense. For one thing, pre-paying probably makes you more likely to choose Uber over a taxi since you want to use up your stored balance, especially if unused balances roll forward each month. More habitual usage then provides a greater volume of usage data for Uber to help drivers predict demand and routes ahead of time. Lastly, prepaid funds can provide some short float to Uber.

Companies in cities where Uber operates could be signed up for a corporate perks program in which the company could deposit a monthly stipend into each employee's Uber account. That would be a great way for Uber to introduce themselves to and acquire lots of new users en masse, in addition to being a great perk in a city like San Francisco, where I can never seem to find a cab when I really need one.