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>> that price gouging actually makes everyone better off by ensuring greater supply and allocating the supply to (approximately) those with the greatest demand

by ollysb 12y ago

>> that price gouging actually makes everyone better off by ensuring greater supply and allocating the supply to (approximately) those with the greatest demand I think the issue is that it's not those with the "greatest demand" but those with "the greatest demand and can afford higher prices" i.e. the service isn't equally available to people during surge pricing, it skews heavily towards the wealthier, "(approximately)" massively understates the significance of this.

shurcooL 12y ago
You have a good point, but is there a problem with it being more available to wealthier people? Everything else being equal, say person A watches Breaking Bad for 7 hours and works for 1, having less money in pocket compared to person B who worked 8 hours that same day. Should both people have equal spending ability?
- monochr 12y ago
  There might or might not be a moral case for this. But to say that this allows the market to act like Marx's utopia of to each according to their need is not only wrong, but a lie anyone with the minimum one week in an undergraduate economics course should see.
- phaer 12y ago
  In most parts of society, wealth has little to do with the time spent working.
- zachlipton 12y ago
  Do you honestly think that poorer people are poorer because they sit around watching Breaking Bad all day? Have you perhaps ever met someone who works hard at three jobs at minimum wage and can't make ends meet, especially in an incredibly expensive city like NYC? I mean what planet are you living on?
Vik1ng 12y ago
Yeah this it also allows you to be sure that you will be able to get a taxi on New Year’s Eve as long as you’re willing to pay extra. was already possible. But "extra" here doesn't mean a few bucks, but a shitload of money. You could already hire a personal driver, if you were willing to pay for it.
cma 12y ago
The idea is a rich guy can still quickly get to the beautician during a disaster. He's earned this right and is basically just cashing in on years of hard work skimming off the top of workers's 401K trading fees--these workers were forced to select from a few mutual funds chosen based on family ties with the executives, but he worked damn hard to be born to the right board member. Highest bidder would work great and allow excellent prioritization if everyone had roughly the same means. This is a bit like economist worship of the Coase Theorem--it completely falls apart when you factor in marginal utility of additional dollars to individuals at different levels of wealth.
- icebraining 12y ago
  An actually rich guy will just call his driver.
- SilasX 12y ago
  I sympathize with the resentment of those who got unfair advantages from exploiting others, but preventing goods from being economized based on price signals entirely is not the right response. From the fact that some wealth is unjustly acquired, it doesn't follow that we should expect everything to cost the same and be allocated by queuing.
- tptacek 12y ago
  No, that's not the idea. If surge pricing was in effect all the time --- if travel pricing was always an auction and drivers were kept scarce to keep prices up --- then Uber rides would be a service for the rich. But disasters are rare, and the surge multiple is merely the equivalent of several Uber rides instead of one. Meanwhile, the alternative to surge pricing is a high likelihood of not getting a ride at all, because disasters suppress demand. It's hard to see the class-warrior logic in this situation. (Later, you edited your comment) It's a caricature to suggest that "Coase" is, to economists, a license to apply the free market to every public policy problem. Meanwhile: you have to actually make the case that there's a distributional problem with surge pricing for Uber rides. If the alternative is no rides at all, then surge pricing makes some people --- not all of them rich --- better off while making nobody worse off.
jayd16 12y ago
But this is true even without surge pricing.
alexeisadeski3 12y ago
Richer people can afford more stuff, more news at 11.
declan 12y ago
> it skews heavily towards the wealthier I'd say it skews heavily toward those with the greatest demand, as the previous post said. If you have average financial resources and needed to get to the hospital in the middle of a snowstorm, you stood a better chance under Uber's previous model that allowed a market-clearing price. Now that some NY politicians have outlawed that process, the price that they permit will be below the market-clearing price and the likelihood of shortages will increase. Put another way, Uber drivers will (sensibly) venture out in snowstorms only if they can make significant $$$. Hope you're well enough to walk to that hospital! Thanks, Albany! (Note I'm not an interested party here: I own a late-model car, I don't live in NYC, and I've used Uber and similar services < 5 times this year. But someone was wrong on the Internet and clearly needed to be corrected.) :)

by ollysb 12y ago

shurcooL 12y ago

You have a good point, but is there a problem with it being more available to wealthier people? Everything else being equal, say person A watches Breaking Bad for 7 hours and works for 1, having less money in pocket compared to person B who worked 8 hours that same day. Should both people have equal spending ability?

monochr 12y ago
There might or might not be a moral case for this. But to say that this allows the market to act like Marx's utopia of to each according to their need is not only wrong, but a lie anyone with the minimum one week in an undergraduate economics course should see.
phaer 12y ago
In most parts of society, wealth has little to do with the time spent working.
zachlipton 12y ago
Do you honestly think that poorer people are poorer because they sit around watching Breaking Bad all day? Have you perhaps ever met someone who works hard at three jobs at minimum wage and can't make ends meet, especially in an incredibly expensive city like NYC? I mean what planet are you living on?

Vik1ng 12y ago

Yeah this it also allows you to be sure that you will be able to get a taxi on New Year’s Eve as long as you’re willing to pay extra. was already possible. But "extra" here doesn't mean a few bucks, but a shitload of money. You could already hire a personal driver, if you were willing to pay for it.

cma 12y ago

The idea is a rich guy can still quickly get to the beautician during a disaster. He's earned this right and is basically just cashing in on years of hard work skimming off the top of workers's 401K trading fees--these workers were forced to select from a few mutual funds chosen based on family ties with the executives, but he worked damn hard to be born to the right board member. Highest bidder would work great and allow excellent prioritization if everyone had roughly the same means. This is a bit like economist worship of the Coase Theorem--it completely falls apart when you factor in marginal utility of additional dollars to individuals at different levels of wealth.

icebraining 12y ago
An actually rich guy will just call his driver.
SilasX 12y ago
I sympathize with the resentment of those who got unfair advantages from exploiting others, but preventing goods from being economized based on price signals entirely is not the right response. From the fact that some wealth is unjustly acquired, it doesn't follow that we should expect everything to cost the same and be allocated by queuing.
tptacek 12y ago
No, that's not the idea. If surge pricing was in effect all the time --- if travel pricing was always an auction and drivers were kept scarce to keep prices up --- then Uber rides would be a service for the rich. But disasters are rare, and the surge multiple is merely the equivalent of several Uber rides instead of one. Meanwhile, the alternative to surge pricing is a high likelihood of not getting a ride at all, because disasters suppress demand. It's hard to see the class-warrior logic in this situation. (Later, you edited your comment) It's a caricature to suggest that "Coase" is, to economists, a license to apply the free market to every public policy problem. Meanwhile: you have to actually make the case that there's a distributional problem with surge pricing for Uber rides. If the alternative is no rides at all, then surge pricing makes some people --- not all of them rich --- better off while making nobody worse off.

jayd16 12y ago

But this is true even without surge pricing.

alexeisadeski3 12y ago

Richer people can afford more stuff, more news at 11.

declan 12y ago

> it skews heavily towards the wealthier I'd say it skews heavily toward those with the greatest demand, as the previous post said. If you have average financial resources and needed to get to the hospital in the middle of a snowstorm, you stood a better chance under Uber's previous model that allowed a market-clearing price. Now that some NY politicians have outlawed that process, the price that they permit will be below the market-clearing price and the likelihood of shortages will increase. Put another way, Uber drivers will (sensibly) venture out in snowstorms only if they can make significant $$$. Hope you're well enough to walk to that hospital! Thanks, Albany! (Note I'm not an interested party here: I own a late-model car, I don't live in NYC, and I've used Uber and similar services < 5 times this year. But someone was wrong on the Internet and clearly needed to be corrected.) :)