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Thread: Uber Is Using AI to Charge People as Much as Possible for a Ride

  1. #1

    Uber Is Using AI to Charge People as Much as Possible for a Ride

    https://motherboard.vice.com/en_us/a...ble-for-a-ride

    JORDAN PEARSON May 19 2017

    And now critics worry about what comes next.

    Thanks to complaints from Uber drivers, who were beginning to suspect that the ridesharing company was charging customers more with "upfront pricing" but not paying drivers more in turn, on Friday Uber admitted in a Bloomberg report to using AI to find the upper limit of what people are willing to pay for a ride based on their route in 14 cities.

    The revelation essentially confirms the suspicions of critics like the University of Washington's Ryan Calo and Alex Rosenblat of the Data & Society Research Institute. Together, they wrote a scathing paper that warned Uber may use vast amounts of customer data to act in a predatory manner—for example, price gouging based on your income level or other circumstances.

    This isn't quite what Uber is doing with what it calls "route-based pricing," but the end result may be the same. Basically, Uber uses all the data it has on customer behaviour along particular routes in a given city to serve people different fares based on where they're going. To get an idea of what this means in the context of income inequality, here's an except from the Bloomberg report:

    [Daniel Graf, Uber's head of product] said the company applies machine-learning techniques to estimate how much groups of customers are willing to shell out for a ride. Uber calculates riders' propensity for paying a higher price for a particular route at a certain time of day. For instance, someone traveling from a wealthy neighborhood to another tony spot might be asked to pay more than another person heading to a poorer part of town, even if demand, traffic and distance are the same.

    What this means is that the wealthy may end up paying more for a ride on average if they're consistently travelling, say, from work in a business district to their swanky neighbourhood. On the flipside, fares for the poor may also be jammed up to the limit of what they're willing to pay for a ride if they consistently travel to and from a poor area. It's important to note that Uber isn't looking at individual customers' circumstances, the company claims, but group statistics.

    "Uber has narrated a lot of its expansion with the idea that it's going to supplement public transit options," Rosenblat said in a phone call. "If the turnaround is basically that they can charge people more for living in an underserved area, then that contradicts Uber's earlier narrative."

    Uber has forged partnerships to supplement public transit in several US cities, and in the small Canadian town of Innisfil, Ontario, the company is now providing the sole publicly-subsidized transit option. When transit is run by cities, however, fares are usually decided by balancing an affordable rate for riders with the cost of operating the service, not charging people as much as possible for a profit.

    "What guarantee do users have that they won't be individually selected to receive a higher price?"

    "We price routes differently based on our understanding of riders' choices so we can serve more people in more places at fares they can afford," an Uber spokesperson said in an emailed statement. "Riders will always know the cost of a trip before requesting a ride, and drivers will earn consistently for the work they perform with full transparency into what a rider pays and what Uber makes on every trip."

    Given some of Uber's past transgressions, like the now-infamous "greyball tool" that used the company's data on riders to blacklist law enforcement, Rosenblat said that the risk is there for Uber to use the AI behind route-based pricing to set fares for individual riders, instead of merely everybody who happens to travel along a particular route.

    "Uber certainly has a track record for using personally identifiable information to profile someone for their capacity as a user," Rosenblat said. "What guarantee do users have that they won't be individually selected to receive a higher price?"

    Right now, that guarantee is just Uber's word.



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  3. #2
    So apart from that "public subsidy" business, what's the problem here?

    If you are offered a price for a good or service and it's not "worth it" to you (for whatever reason), then don't buy it. If it is, then do.

    Let markets clear.
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  4. #3
    Uber's going to charge me what they think I am willing to pay??

    There needs to be a law! I'm writing my congressman now.
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  5. #4
    This is good for riders, Uber and Uber drivers.

    Being able to use as much information as possible to create the greatest possible demand and price discriminate to extract the most consumer surplus will create the best customer experience and will allow Uber to pay their drivers more.

    The one big issue I see with pre-determining charges for rides is that some customers like to make multiple stops to drop off friends. If the driver is going out of their way, this benefits the driver because they will get paid more but the customer will still be paying the pre-determined amount to get from Point A to Point B. But apparently nobody wants to write an article about Uber screwing themselves out of money.
    Last edited by dannno; 05-21-2017 at 03:49 AM.
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  6. #5
    Quote Originally Posted by Occam's Banana View Post
    If you are offered a price for a good or service and it's not "worth it" to you (for whatever reason), then don't buy it. If it is, then do.
    lol, you mean pay two a half times as much for a dirty taxi cab?? Yaright...
    "He's talkin' to his gut like it's a person!!" -me
    "dumpster diving isn't professional." - angelatc
    "You don't need a medical degree to spot obvious bullshit, that's actually a separate skill." -Scott Adams
    "When you are divided, and angry, and controlled, you target those 'different' from you, not those responsible [controllers]" -Q

    "Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

    "Paul said "the wave of the future" is a coalition of anti-authoritarian progressive Democrats and libertarian Republicans in Congress opposed to domestic surveillance, opposed to starting new wars and in favor of ending the so-called War on Drugs."

  7. #6
    Libertarians walk eagerly into a trap. What if the AI was used to implement the strategy of
    "From each according to his ability, to each according to his needs"?
    Last edited by timosman; 05-21-2017 at 06:05 AM.

  8. #7
    Quote Originally Posted by timosman View Post
    Libertarians walk eagerly into a trap. What if the AI was used to implement the strategy of
    "From each according to his ability, to each according to his needs"?
    It's ok when private industry does it (voluntary interaction), it is not ok when government does it (involuntary interaction).
    __________________________________________________ ________________
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  9. #8
    The problem is that Uber is telling the customer they are going to charge X amount and telling the driver they are getting paid Y amount. Lots of times the driver gets paid less than what the customer is getting billed for.
    __________________________________________________ ________________
    "A politician will do almost anything to keep their job, even become a patriot" - Hearst



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  11. #9
    Quote Originally Posted by Matt Collins View Post
    It's ok when private industry does it (voluntary interaction), it is not ok when government does it (involuntary interaction).
    The depth of your analysis leaves everybody in your preschool impressed. Even Zippy.

  12. #10
    Quote Originally Posted by timosman View Post
    The depth of your analysis leaves everybody in your preschool impressed. Even Zippy.
    As long as Lyft and other rideshare companies can operate beside Uber, it's not an issue.

    If it's that bad for drivers, then they can move to a different platform, same with riders.
    "He's talkin' to his gut like it's a person!!" -me
    "dumpster diving isn't professional." - angelatc
    "You don't need a medical degree to spot obvious bullshit, that's actually a separate skill." -Scott Adams
    "When you are divided, and angry, and controlled, you target those 'different' from you, not those responsible [controllers]" -Q

    "Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

    "Paul said "the wave of the future" is a coalition of anti-authoritarian progressive Democrats and libertarian Republicans in Congress opposed to domestic surveillance, opposed to starting new wars and in favor of ending the so-called War on Drugs."

  13. #11
    So, when you are in a group and need a ride, you have the "poorest" person schedule it.

    And in your spare time, you request and then reject rides due to price...
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  14. #12
    Quote Originally Posted by TheTexan View Post
    Uber's going to charge me what they think I am willing to pay??

    There needs to be a law! I'm writing my congressman now.
    ZOMG!! Uber's reign of terror must be stopped!!

    Quote Originally Posted by timosman View Post
    Libertarians walk eagerly into a trap. What if the AI was used to implement the strategy of
    "From each according to his ability, to each according to his needs"?
    There is no "trap" here. Matt is right:
    Quote Originally Posted by Matt Collins View Post
    It's ok when private industry does it (voluntary interaction), it is not ok when government does it (involuntary interaction).
    The Marxist dictum of "from each according to his ability, to each according to his needs" is necessarily involuntary (albeit implicitly so). It might as well be stated, "forcibly extract from each according to his ability in order to subsidize each according to his needs."

    Adjusting one's prices (up or down) in order to more closely match what buyers are willing to voluntarily pay is what businesses in markets have always done. Indeed, this phenomenon is one of the defining characteristics of markets. Uber is just taking a more finely-grained approach to the matter.

    If Uber forced people to ride and then forced them to pay for those rides on the basis of its AI-plotted "from each according to his ability" strategy, then the application of Marx's slogan would become valid. But until those conditions are met, any such analogy is just absurd nonsense. (And even if those conditions were met, Uber's computers would just end up running smack into Mises' intractable "socialist calculation problem" ...)

    Matt is wrong about this, though:
    Quote Originally Posted by Matt Collins View Post
    The problem is that Uber is telling the customer they are going to charge X amount and telling the driver they are getting paid Y amount. Lots of times the driver gets paid less than what the customer is getting billed for.
    So what? So long as Uber does in fact charge the rider the amount X it tells the rider it is going to charge, and so long as Uber does in fact pay the driver the amount Y it tells the driver it is going to pay, then there is nothing wrong here. The fact that X is greater than Y is unproblematic and irrelevant.

    The exchange between a driver (as seller) and Uber (as buyer) is an entirely separate transaction from the exchange between Uber (as seller) and a rider (as buyer). As the middleman, Uber's profits derive from the "arbitrage" between these distinct transactions.

    IOW: Having correctly rejected timosman's application of the Marxist precept of "from each according to his ability" to this situation, Matt ironically proceeds to (unwittingly) apply the Marxist concept of "surplus value" as a criticism of what Uber is doing ...

  15. #13
    Quote Originally Posted by Matt Collins View Post
    It's ok when private industry does it (voluntary interaction), it is not ok when government does it (involuntary interaction).
    No, it's not.

    for example, price gouging based on your income level
    Why the $#@! does my cab driver need to know how much money I make?

    In a real cab, paid for with real money, the cab driver would not even know my name, which is the way I want it and like it.

    But, because I am a minority, I will get swept away in the flood of Idiot AmeriKunts falling all over themselves to embrace this nonsense, and I will no longer have a choice.

  16. #14
    Lots of times All of the time the driver gets paid less than what the customer is getting billed for.
    Fixed that. Uber wouldn't exist without making money.
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  17. #15
    Quote Originally Posted by Anti Federalist View Post
    No, it's not.



    Why the $#@! does my cab driver need to know how much money I make.

    In a real cab, paid for with real money, the cab driver would not even know my name, which is the way I want it and like it.

    But, because I am a minority, I will get swept away in the flood of Idiot AmeriKunts falling all over themselves to embrace this nonsense, and I will no longer have a choice.
    I don't understand how can you not see how this is good for you? The total lack of transparency of how the market functions, as no two people pay the same price for anything, is exactly out of the Communist Manifesto. I am totally reassured this will not be abused given the verbal reassurance from the market participants.

    "If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy."

  18. #16
    Quote Originally Posted by Anti Federalist View Post
    No, it's not.



    Why the $#@! does my cab driver need to know how much money I make?

    In a real cab, paid for with real money, the cab driver would not even know my name, which is the way I want it and like it.

    But, because I am a minority, I will get swept away in the flood of Idiot AmeriKunts falling all over themselves to embrace this nonsense, and I will no longer have a choice.
    I'm with you. I don't have an Uber account.

    Imagine the day where everything you buy is individually priced based upon your Google Payablity Index (TM). It will be the ultimate in social justice, comrade.

    "I'll have a hamburger"

    "Please look into the scanner. Thank you, that will be $12, Mr. AF. We do hope your dog is feeling better after that huge vet bill, and happy birthday too! Please come back when you can afford to make another purchase."

    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.



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  20. #17
    Quote Originally Posted by Brian4Liberty View Post
    Fixed that. Uber wouldn't exist without making money.
    For the record Uber is not making any money (yet?).

  21. #18
    Quote Originally Posted by Matt Collins View Post
    The problem is that Uber is telling the customer they are going to charge X amount and telling the driver they are getting paid Y amount. Lots of times the driver gets paid less than what the customer is getting billed for.
    As a matter of news and information this is the useful point of the thread. If anyone is calling for government action then they don't belong on this forum.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

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  22. #19
    Quote Originally Posted by timosman View Post
    For the record Uber is not making any money (yet?).
    Would you prefer the term revenue?
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  23. #20
    Quote Originally Posted by Brian4Liberty View Post
    Would you prefer the term revenue?
    Nope, but this what everybody else prefers.

  24. #21
    Quote Originally Posted by Anti Federalist View Post
    No, it's not.



    Why the $#@! does my cab driver need to know how much money I make?

    In a real cab, paid for with real money, the cab driver would not even know my name, which is the way I want it and like it.

    But, because I am a minority, I will get swept away in the flood of Idiot AmeriKunts falling all over themselves to embrace this nonsense, and I will no longer have a choice.
    Then don't use Uber.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  25. #22
    Quote Originally Posted by Swordsmyth View Post
    Then don't use Uber.
    And once Uber becomes the modus operandi for all transport companies you can move to a different planet.

  26. #23
    Quote Originally Posted by timosman View Post
    And once Uber becomes the modus operandi for all transport companies you can move to a different planet.
    Or use your own car. That is assuming your prognostication comes true.
    What do you want done? Government action? a Mass Protest? What?
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  27. #24
    Quote Originally Posted by Swordsmyth View Post
    Or use your own car. That is assuming your prognostication comes true.
    What do you want done? Government action? a Mass Protest? What?
    How about abolishing ZIRP? Uber is burning tons of cash and the only way this is possible is cheap credit.



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  29. #25
    Quote Originally Posted by timosman View Post
    How about abolishing ZIRP? Uber is burning tons of cash and the only way this is possible is cheap credit.
    That is something we should do whether it affected Uber or not. It has nothing to do with whether you like what Uber does.

    Thanks for the Neg Rep for a pro-liberty comment you statist moron.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  30. #26
    Quote Originally Posted by Swordsmyth View Post
    That is something we should do whether it affected Uber or not. It has nothing to do with whether you like what Uber does.
    Uber's existence is a direct result of ZIRP. I am sorry if this is too hard for you to grasp.

    Thanks for the Neg Rep for a pro-liberty comment you statist moron.
    I would rather prefer you kept it short without attaching two fallacies to an otherwise friendly exchange of pleasantries.

  31. #27
    Quote Originally Posted by timosman View Post
    Uber's existence is a direct result of ZIRP. I am sorry if this is too hard for you to grasp.
    But any company could institute these policies, no matter how they were financed, ZIRP is philosophically irrelevant to the discussion.



    Quote Originally Posted by timosman View Post
    I would rather prefer you kept it short without attaching two fallacies to an otherwise friendly exchange of pleasantries.
    Neg Rep is a pleasantry?
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  32. #28
    Quote Originally Posted by Swordsmyth View Post
    But any company could institute these policies, no matter how they were financed, ZIRP is philosophically irrelevant to the discussion.
    If it was not for ZIRP, Uber would have to fold or not even be funded in the first place. This what Ron Paul talks about when he mentions malinvestment - https://en.wikipedia.org/wiki/Malinvestment


    Neg Rep is a pleasantry?
    This is rather innocuous for somebody as misguided as you are.

  33. #29
    Quote Originally Posted by timosman View Post
    If it was not for ZIRP, Uber would have to fold or not even be funded in the first place. This what Ron Paul talks about when he mentions malinvestment - https://en.wikipedia.org/wiki/Malinvestment
    Just like a liberal, No brain, No understanding of principle, just attack anything I don't like anyway I can.


    Quote Originally Posted by timosman View Post
    This is rather innocuous for somebody as misguided as you are.
    LOL from the guy who thinks that The government should find some way to attack a business he doesn't like.

    Please Note I oppose ZIRP.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  34. #30
    Quote Originally Posted by timosman View Post
    Uber's existence is a direct result of ZIRP. I am sorry if this is too hard for you to grasp.
    Uber would operate anyway without ZIRP, it would just be a slightly different business strategy. They would still be wiping the cab industry off the map and profiting just fine without all the cheap credit. They are just leveraging the cheap credit and doing it faster.

    Like I said, you wanna pay 2.5x the amount to a "real" cab to has to pay exorbitant fees to the government (@Anti Federalist) then go ahead. I prefer to get a better car and less government regulated, better service for a cheaper price to someone who can use their vehicle for personal use so it is less costly to operate. Unfortunately you have to give up your anonymity (to Uber, not the driver), but there are a lot of benefits that Uber can provide as a company to the customer by giving them their paypal account and email address.
    Last edited by dannno; 05-21-2017 at 03:10 PM.
    "He's talkin' to his gut like it's a person!!" -me
    "dumpster diving isn't professional." - angelatc
    "You don't need a medical degree to spot obvious bullshit, that's actually a separate skill." -Scott Adams
    "When you are divided, and angry, and controlled, you target those 'different' from you, not those responsible [controllers]" -Q

    "Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

    "Paul said "the wave of the future" is a coalition of anti-authoritarian progressive Democrats and libertarian Republicans in Congress opposed to domestic surveillance, opposed to starting new wars and in favor of ending the so-called War on Drugs."

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