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They could have dug into their own pockets and paid their drivers the 2x pricing, That would do nothing about demand (spiked because of mass transit closures).
by uvdiv 14y ago
They could have dug into their own pockets and paid their drivers the 2x pricing,
That would do nothing about demand (spiked because of mass transit closures). Discouraging consumption with price increases is to customers' benefit: it keeps the service available. You have choice of not riding by taxi, or paying twice the price; with a shortage, you have no choice -- you're stuck. (Of course Uber's PR is about the supply side; the demand effect is way too non-PC).
- icebraining 14y agoThat's the rational argument, and yet, they clapped: http://www.econlib.org/library/Columns/y2007/Mungergouging.html http://www.econlib.org/library/Columns/y2007/Mungergouging.h... People prefer to have a shortage than feeling cheated.
- uvdiv 14y agoJudging by your essay, they prefer feeling cheated to having a shortage -- it's other people's shortage they don't care much about. They buy the price-"gouged" products, then they support arresting the guy who sold them. They are free to go home empty-handed with their confused ethics intact. This is a failure of political economics (not market failure). They didn't see the market choice. They thought the choice was political: don't buy, or get the police to make the guy lower his prices. They walk away with nothing.
- untog 14y agoI don't think that anyone is disagreeing with what you're saying, but you can either go along with the (illogical) positions and choices people have, or try to challenge them. If you try to challenge them you run the risk of backlash.