I live in New York and use Uber a lot. Last week during the tropical storm, I opened the app to use it but found the surge pricing to be too rich for my blood. I hopped on the train instead (it was only 2 blocks away anyway).
Surge pricing works! That car I would have used stayed available for someone that needed it a lot more than I did.
That car I would have used stayed available for someone that needed it a lot more than I did.
That car stayed available for someone willing to pay more money. Between two people of roughly equal means, that's a good proxy for "needs it more." Between two people of vastly disparate means it's not.
Right, but that's a fundamental feature of capitalism. If equality of access to a non-essential luxury between those of disparate means concerns you, don't worry about the symptom, worry about the underlying system. On the other hand, if unequal access to, say, 5 star hotels in Times Square on New Years Eve doesn't bother you, then neither should surge pricing.
I'm not sure taxi service qualifies as a "non-essential luxury"; there are times when it isn't (a rainstorm, for instance) and I think that's why it draws the political interest that it does.
PS I inadvertently downvoted you, unfortunately there doesn't seem to be a way to upvote it back. Sorry...
No worries on the inadvertent downvote. I do, however, have to take issue with the characterization of a taxi as an essential. :)
Seriously, though, even in a rainstorm a taxi is a non-essential. It's nice, and I'd certainly prefer one if it's raining, but it isn't essential. There always exist alternate modes of transportation that are going to be less expensive (public transit, Zipcar, your own car, or an umbrella and your own two feet). It's not as though one, bereft of an affordable taxi, can never reach one's destination.
I just don't see how Uber can possibly be construed as an essential, except maybe in highly exceptional circumstances. You're hiring someone to chauffeur you to your destination with an expensive computing device, via a similarly expensive data connection. How is that anything but the definition of a non-essential, luxury good?
You're a mother carrying groceries and a kid and you have to walk ten blocks. Is it as essential as medical treatment? No, but it's a substantial degradation of your quality of life if you get priced out of it. I think the political attention on the topic speaks for itself as to how essential the public views it. And we're not just talking about Uber here, we're talking about taxis in general: if Uber drives taxis out of business by undercutting them during ordinary circumstances, there won't be any around to undercut Uber during a surge.
Completely wrong. THis comment betrays how people completely fail to understand resource allocation in a market economy. Willing to pay more means their time is worth more. Their time is worth more because they create more value per unit time than others. We want productive people to become even more productive, that's how the world gets better. The internet didn't improve the world by starting with connecting Indian villages. It improved the productivity of those who were already leading productive lives in first world economies.
Rather than simply downvoting you because I disagree, which is a lazy practice that undermines the purpose of having a comment system, let me address your point. You said:
Willing to pay more means their time is worth more.
No, it may simply mean that money is worth less to them. A common reason for this is having a lot of it, and there are many possible reasons for someone to be wealthy; being socially productive is only one of many. They might have been born with it, they might simply be lucky, or they may be actively dishonest. None of which need any additional incentives.
> No, it may simply mean that money is worth less to them.
You started your sentence with "No", and then literally stated the exact same thing in different words. Saying "a unit of their time is worth more of their money than the equivalent for person X" is exactly equivalent to "a unit of their money is worth less time than the equivalent for person X". The only difference between your statement and the statement you think you're disagreeing with is whether you choose to denominate "worth" in time or money: the end result however, is identical.
If you read the rest of my comment, you'll see that it is not identical at all. For instance, why would a lottery winner value their time more highly? Their time doesn't earn them anything. And you went beyond saying that the individual values their time more, you implied that society should also value it more to encourage productivity. But again, what kind of productivity are we encouraging from a lottery winner, a trust fund baby, or a con artist?
> For instance, why would a lottery winner value their time more highly? Their time doesn't earn them anything.
You're still not understanding what the point of my comment was. There's no platonic unit that we're comparing both time and money too such that one of them can change and the other doesn't; the "value" of time and money is relative to the other thing.
A person who has won the lottery _absolutely_ values their time more highly than they did before. Or are you suggesting that if someone was poor and then wins the lottery they'd be exactly as likely to take cabs vs a much slower/cheaper public transit route? Exactly as likely to hire house cleaners, or order delivery at the same frequency instead of cooking dinner? Valuing a unit of money less simply _means_ valuing time more; this isn't an empirical consequence, it's practically definitional. If a dollar means less to you because you have so much more $$, and an hour of your time means the same amount to you, _that literally mathematically means that an hour is worth more dollars to you_. This concept is so incredibly basic that I am actually running out of different ways to phrase it.
> And you went beyond saying that the individual values their time more, you implied that society should also value it more to encourage productivity.
What....the hell? Where did I say anything like this? My only contribution to this subthread was pointing out how you misunderstood the concept of two things being valued relative to each other. There was no commentary at all on whether society _should_ do anything (and any implication came purely from your imagination); in fact I personally happen to think that extremely high estate taxes are an excellent idea; chance, inheritance, and the fact that markets aren't perfect reflectors of value all do a pretty good job of decoupling wealth from any notion of "deserving-ness".
Or are you suggesting that if someone was poor and then wins the lottery they'd be exactly as likely to take cabs vs a much slower/cheaper public transit route?
No, I'm saying their desire to take a cab wouldn't change. The fact that I can't afford to buy the Hope Diamond doesn't mean I value it at zero. Likewise, the fact that I can't afford to buy myself an extra ten minutes by getting a taxi doesn't mean that I place no value on those ten minutes.
> And you went beyond saying that the individual values their time more, you implied that society should also value it more to encourage productivity.
What....the hell? Where did I say anything like this?
I think it was this bit, where you say wealthy people's time is worth more because they're more productive and we should encourage such productivity:
"Their time is worth more because they create more value per unit time than others. We want productive people to become even more productive, that's how the world gets better."
My claim has nothing to do with resource allocation in a market economy. It is merely that one cannot derive "needs it more" from "willing and able to pay more." It may well be that adopting "willing and able to pay more" as the standard for resource allocation yields the highest possible level of human flourishing. It might even be true that statist capitalism unfolding from the starting conditions of the world as it exists today is what will yield the highest possible level of human flourishing (though I doubt it.)
Even if all that is true, the most one can say if a rich person outbids a poor person for a good is that the transaction proceeded according to a principle that will tend to maximize human flourishing.
To say that it demonstrates that the other person needs it more, or values it more, is simply a category error.
Are there these large armies of people who can afford and pay for taxis over public transportation at 1x but not exceptionally during a topical storm at 5x or 10x? A taxi is already a luxury good.
Most New Yorkers don't own cars, but there are still trips that are very inconvenient by public transit (especially with kids or luggage or ...). So it makes a lot of financial sense for a lot of people of all means to use taxis/car services occasionally to supplement mass transit, as opposed to buying (and very expensively insuring!) a car for the occasional trip that's hard to take transit for.
Depending on your definition of emergency, it is when you live in NYC and your rent costs $2k/month. If by emergency you mean "hurricane" - sure. But surge pricing happens every time there's a rainstorm.
Surge pricing works! That car I would have used stayed available for someone that needed it a lot more than I did.