
Honolulu lawmakers agree to cap surge pricing for Uber and Lyft - JumpCrisscross
https://www.latimes.com/business/technology/la-fi-tn-uber-lyft-price-cap-20180607-story.html
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Meekro
"We economists may not know much, but we know one thing very well, and that's
how to create shortages and surpluses. Just tell us which you want! If you
want a shortage, all we have to do is to set a price that's below the market
price and I'll guarantee you a shortage. If you want a surplus, set a price
too high and you'll have your surplus." \-- Milton Friedman

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Johnny555
_U.S. Navy sailors getting off ships in Pearl Harbor recently were quoted as
much as $221 to get to Waikiki when a cab ride was $44_

So what's the problem? Let them take a cab.

Oh, there's not enough cabs to meet demand when hundreds of sailors get off
the ship? Well that's why they have surge pricing -- to get more drivers on
the road. If you don't like the surge price, wait until demand subsides.

I'd rather have the option to split a $200 ride with my buddies and get to
Waikiki now than to pay $44 and have to wait 2 hours for a cab. If I wanted to
wait, I'd just wait until the surge pricing dropped.

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CogitoCogito
> Oh, there's not enough cabs to meet demand when hundreds of sailors get off
> the ship? Well that's why they have surge pricing -- to get more drivers on
> the road. If you don't like the surge price, wait until demand subsides.

Using surge pricing to get drivers on the road is unnecessary. If the Navy
knows that many of its sailors will be going into Waikiki after getting off
the ship, why doesn't it just organize some buses to bring them in? Surge
pricing seems more like a last resort "we didn't see this coming, but this can
help bring supply to the demand", but in this case a little forethought would
be much better.

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Johnny555
Because they aren't all going to Waikiki -- some are going to Mililani,
Kaneohe or Kapolei to go home, others are going to downtown Honolulu or
elsewhere on the Island.

And who wants to wait an hour for the official shuttle bus to leave when you
can call an Uber and leave now? And if they want to take a bus, they can take
TheBus and spend less than $3. Some day (7 years or so), taking the train to
Waikiki will be an option.

For all I know, maybe the military already contracts with buses for those that
are willing to put up with the inconvenience, but there are always those that
are willing to pay more to get there faster.

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toomuchtodo
Seems like the solution is to tax ridesharing rides, and use that to speed up
light rail to Waikiki and run a more frequent shuttle bus service.

This ensures minimum levels of service for everyone, but if you want to
rideshare on demand, you can!

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clamprecht
Won't this just reduce the supply of Uber & Lyft when demand is highest? In
other words, instead of having the choice to pay more (or not), you just won't
get an Uber (because fewer drivers will be incentivized to drive during surge
periods)?

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llukas
Why assume there are always extra drivers? At some point pool of drivers is
exhausted and supply of drivers likely not super elastic.

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mojomark
So what? If people don't want to pay surge prices, they don't have to. Just
don't take an Uber or Lyft ride. Ride sharing isn't a human right.

If the government wants to step in, maybe they should create a state sponsored
and run ride share service of their own.

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clamprecht
In fact, the article even said riders "were quoted as much as $221 to get to
Waikiki when a cab ride was $44."

So if the cab ride was $44, why not just take the cab?!

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jwatte
Because no cabs were actually available at that price: they were all taken.

When there is scarcity, there are three ways to solve it: \- allocating to
those who exchange (pay) most \- allocating based on lottery \- allocating
based on nepotism

We now know what the politicians there prefer.

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s2g
or just first come first serve.

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Spivak
Which is just lottery with fewer steps.

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wtfrmyinitials
Honolulu lawmakers agree to cap hourly pay of Uber and Lyft drivers

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anonuser123456
I hear price caps on bread are working well in Venezuela too.

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wasx
Wow. Is this seriously how far conversation on this site has descended?

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ajmurmann
It's the same principles isn't it? Government missing basic economic literacy.

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damnyou
A cap on surge pricing doesn't show economic illiteracy. It is a choice made
by the people (represented by the government) to prefer longer waits over
higher prices.

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anonuser123456
An alternative narrative might mention something about rent seeking.

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ajmurmann
How is that?

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wskinner
Parent is pointing out that cab drivers have an interest in limiting
alternatives to taking a cab. By doing so they earn a premium over the market
price of the transportation they are providing.

Cab companies are locally based, therefore have more to lose from loss of
business in any given market, and are more likely to have connections to local
politicians. So parent is suggesting that cab companies may use their
political influence to try to shape policy in their economic favor.

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gardnr
Aren't heavy regulations of taxis the thing that created a market for Uber in
the first place?

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omeid2
Possibly, but the opposite of heavy regulation isn't wild west.

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ericsoderstrom
Not setting a surge cap is hardly "wild west."

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omeid2
Sure, but you could say that just about any specific rule and regulation. It
is the whole system that matters.

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RcouF1uZ4gsC
>As the wife of a sailor, she said she wants to protect service members from
being “price gouged.”

When I see a law that aims to prevent "price gouging", my first instinct is to
oppose it. This is in general a choice that favors shortages instead of market
prices.

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dahdum
Don't forget that Uber doesn't quote the same price to everyone, they may be
targeting that sailor specifically for increased rates based on data mining
inferring they have no other options.

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anonuser123456
You're assuming the market is uncompetative. A lot of islanders also drive for
Lyft.

Also, Uber wants to maximize profits. There are no profits when riders can't
pay. They have an incentive to ensure they aren't pricing riders out of the
market or driving them to competitors.

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randyrand
lawmakers think they know more about pricing products than the marketplace?
That will end well.

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gamblor956
Interestingly enough, airlines and utilities were at their most profitable
when the government regulating agencies set the rates. Once their industries
were deregulated, most of these companies went out of business and have had
more years of loss than profit.

As it turns out, sometimes the government does know better than private
companies. In general, in any situation dealing with a utility-type service
(including transportation), the government has a better bird's eye view than
any of the participants and more of an incentive to maintain the
quality/availability of service over the long-term than any of the short-term-
profit-seeking participants.

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pitaj
It may have been better for companies, but was it better for customers? It
sounds like the bureaucrats set the price too high, which created a surplus.

Almost all customers of airlines want lower prices, not more amenities.

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jwatte
If it is ONE thing a free market actually does well, it's setting the right
price for commodities based on people's wishes.

And that ONE thing, the politicians think they can do better?

I'm all for a supportive state, but regulatory capture and forced pricing is
not supportive.

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intopieces
Capped at what? Article doesn't say, unless I missed it. That makes a
difference.

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zouhair
Good.

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taysic
I thought lawmakers were upset Uber drivers weren't making enough? This is
contradictory.

