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As a supporter of price gouging laws, the idea isn't that there should be no cars. No one expects UberCar to look at the situation, say "We're losing $X millio
by rprospero 14y ago
As a supporter of price gouging laws, the idea isn't that there should be no cars. No one expects UberCar to look at the situation, say "We're losing $X million per day. Oh well." and keep sending cars out on the street. The plan for price gouging laws is for Uber to say "We're losing $X million per day and our Hurricane insurance will pay out $Y million. This will leave us $Z million ahead." The problem is that, for Uber, Y = 0.
Under the price gouging model, every company would be charging extra on a daily basis outside of emergencies to either buy insurance or build a safety fund to use during disasters. Instead of gouging some guy $100 after a hurricane, Uber is expected to gouge everyone 25¢ year round. This slows the economy during the good times, but keeps things running smoothly in the bad.
Whether or not this is a good model is freely debately, but that's how it was intended to work.
- pbiggar 14y agoUber don't control the cars or employ the drivers, and can't force their drivers to be out on the street. They have a very good mechanism for ensuring supply during high demand: allow their drivers to charge more. I see that it would be possible for them to have a hurricane fund which they would use to encourage the drivers to come out, but I don't think its fair to expect them to have expected this. To be honest, I don't see this as gouging. Its a 2-sided marketplace, and there are pretty simple economics at play.