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>I do want to note that you can pay with dollars or pay with time. And it's generally far better overall to pay with money. If you pay with money, then someone
by ThrustVectoring 8y ago
>I do want to note that you can pay with dollars or pay with time.
And it's generally far better overall to pay with money. If you pay with money, then someone gets that money - Uber drivers earn more through surge pricing, in this instance.
If you pay with time, then that time is simply gone forever.
- vkou 8y agoIt's not raining. There's one cab. The fare costs 5 dollars. There's one rider. Everything works great. It's raining. There's one cab. The fare costs 5 dollars. There's two riders. The driver flips a coin. One rider pays $5, and gets a ride. The other has to wait, and then gets a ride. It's raining. There's one cab. There's surge pricing, so the fare costs $15. There's two riders. One rider can afford to pay $15, and gets a ride. The other has to wait, until the surge dies down, and then pays $5 for a ride. When there's a shortage of cabs, someone will have to pay with money. Under the lottery system, it's a random rider. Under the price surge system, it's the poorest rider. You haven't actually produced any more value in the third case. The same amount of time is wasted.
- perl4ever 8y agoIt's not the "poorest" rider though who pays with time. It's the person who values the ride the least relative to time. That isn't totally uncorrelated, but it's significantly not the same, which is what produces more value.