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I got hit by a price modifier during my last trip using Uber, but I didn't (and still don't) think gouging is the right word. I figure it's supply and demand mo

I got hit by a price modifier during my last trip using Uber, but I didn't (and still don't) think gouging is the right word. I figure it's supply and demand modifier. They can't change supply, but demand has gone up for some reason (storms, in your scenario and mine, actually). Some people aren't willing to pay more, so it curbs demand, while incentivizing drivers who may not wish to drive in inclement weather to stay out. Of course, it's really just taking advantage of a situation to Uber's benefit, but I still think "gouging" is too strong of a word for it.

saraid216 13y ago
Price gouging is supply and demand. It's just supply and demand in ways that seem particularly unfair, like withholding food to make a profit. Whether or not you call it gouging mostly has to do with how essential a service you consider transportation to be.
- jaibot 13y ago
  It's not gouging when there's competition - all of the other ways of getting around (cabs, public transit, friends who have cars, other ride sharing/providing services) are as available as they were previously. If Uber were the _only_ way to get around, then it could _potentially_ be gouging.
- jseliger 13y ago
  Price gouging is supply and demand. It's just supply and demand in ways that seem particularly unfair, like withholding food to make a profit. As noted elsewhere in this thread, the alternative is a shortage—that is, not being able to acquire it for any price. Wanting to make a good or service unavailable to anyone at any price is... odd. See http://www.econtalk.org/archives/2007/01/munger_on_price_1.html http://www.econtalk.org/archives/2007/01/munger_on_price_1.h... for more.
  - Philadelphia 13y ago
    A shortage for everybody is more fair than a shortage just for those who aren't able to pay.
    - ewang1 13y ago
      It doesn't matter that it isn't "fair". There are going to be people who are willing to pay the increased rate. The alternative is no drivers on the road, so the increased demand pricing probably comes out on top in terms of number of rides completed.
    - natrius 13y ago
      Surge pricing lures more drivers to the road because of the extra profit. More passengers are moved with surge pricing than without it. You're saying that it's more "fair" for fewer people to get the rides they want? Laws against price gouging are almost always against the public interest.
      - jacalata 13y ago
        Is there evidence for this actually happening, or is it still just a hypothesis? I don't remember seeing any evidence for "more drivers drove during the storm/on NYE than would have without increasing prices" the last few times it came up.
    - eddieroger 13y ago
      Business isn't fair, and not all services are targeted at all consumers. Rates stabilize to what the market will bear. If the $texas higher that Uber was during peak times was the norm, Uber wouldn't have business. If it was lower, cars would never be available. This is just an adjustment that they specifically call out. Besides, this is a black car service we're talking about and not public transit, and even the bus costs more during some times of the day. Also, it's not an overall shortage. Take San Francisco for example: there are lots of public transportation options, yellow cabs, and Uber clones, forgetting walking or bicycles. What's in shortage? Only Uber.

saraid216 13y ago

Price gouging is supply and demand. It's just supply and demand in ways that seem particularly unfair, like withholding food to make a profit. Whether or not you call it gouging mostly has to do with how essential a service you consider transportation to be.

jaibot 13y ago
It's not gouging when there's competition - all of the other ways of getting around (cabs, public transit, friends who have cars, other ride sharing/providing services) are as available as they were previously. If Uber were the _only_ way to get around, then it could _potentially_ be gouging.
jseliger 13y ago
Price gouging is supply and demand. It's just supply and demand in ways that seem particularly unfair, like withholding food to make a profit. As noted elsewhere in this thread, the alternative is a shortage—that is, not being able to acquire it for any price. Wanting to make a good or service unavailable to anyone at any price is... odd. See http://www.econtalk.org/archives/2007/01/munger_on_price_1.html http://www.econtalk.org/archives/2007/01/munger_on_price_1.h... for more.
- Philadelphia 13y ago
  A shortage for everybody is more fair than a shortage just for those who aren't able to pay.
  - ewang1 13y ago
    It doesn't matter that it isn't "fair". There are going to be people who are willing to pay the increased rate. The alternative is no drivers on the road, so the increased demand pricing probably comes out on top in terms of number of rides completed.
  - natrius 13y ago
    Surge pricing lures more drivers to the road because of the extra profit. More passengers are moved with surge pricing than without it. You're saying that it's more "fair" for fewer people to get the rides they want? Laws against price gouging are almost always against the public interest.
    - jacalata 13y ago
      Is there evidence for this actually happening, or is it still just a hypothesis? I don't remember seeing any evidence for "more drivers drove during the storm/on NYE than would have without increasing prices" the last few times it came up.
  - eddieroger 13y ago
    Business isn't fair, and not all services are targeted at all consumers. Rates stabilize to what the market will bear. If the $texas higher that Uber was during peak times was the norm, Uber wouldn't have business. If it was lower, cars would never be available. This is just an adjustment that they specifically call out. Besides, this is a black car service we're talking about and not public transit, and even the bus costs more during some times of the day. Also, it's not an overall shortage. Take San Francisco for example: there are lots of public transportation options, yellow cabs, and Uber clones, forgetting walking or bicycles. What's in shortage? Only Uber.