
Uber’s “Price Gouging” Is the Future of Business - johnpark
http://blogs.hbr.org/2013/12/ubers-price-gouging-is-the-future-of-business/
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vannevar
No, it's not. There is nothing new or innovative about Uber's business model.
Nothing. It is a gypsy taxi service, and gypsy taxis have existed for as long
as taxis have existed. Licensed taxi fares are uniform for very good reason:
predictability and fairness. In the long run, no one wants to risk being
stranded in a snowstorm just so they can pay less on a sunnier day. And in
many urban environments, taxis are an integral part of the public
transportation system, even though they are privately operated. In that
context, it's unfair to permit the wealthy to co-opt that infrastructure for
their exclusive use, simply because they can outbid their poorer neighbors.

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aianus
If the price is artificially low taxi drivers will just stay home rather than
go out and make the same amount of money as any other day while fighting
traffic and dangerous road conditions.

Furthermore, getting a taxi will degenerate into a lottery of being in the
right place at the right time instead of going to the highest bidder (which is
much more fair and forces people to re-evaluate if they _really_ need a taxi
or if maybe they could walk)

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vannevar
_a lottery of being in the right place at the right time instead of going to
the highest bidder (which is much more fair...)_

A lottery where everyone has an equal chance of winning is by definition
fairer than a system where 98% cannot participate because they cannot afford
to.

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aianus
The prices are not so high that they're unaffordable in an emergency. If it's
not an emergency, then we should ration it the same way we ration any other
non-essential consumer good when demand exceeds supply: by raising the price.

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vannevar
I think it depends on how essential one regards the service, and on your
income-dependent definition of 'unaffordable'. In bad conditions, taxi service
might be considered more essential to many than it is during normal times. And
I think 'eight times its normal rate' qualifies as unaffordable for most.

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aianus
Unless you're dying or giving birth, I don't see how a limo ride is an
essential service.

Even at 8x surge pricing (maybe $500 for a ride across Manhattan), Uber is
much cheaper than an ambulance. Why are people mad at Uber and not the
ambulance companies that charge insane prices for an essential service where
they enjoy a monopoly?

~~~
vannevar
We're not necessarily talking about emergencies, we're just talking about
ordinary life. Like someone who needs to get to his kid's birthday party, or
home in time to get a decent night's sleep before work the next day.

And I think people _are_ mad at ambulance companies, which is why the country
is grappling with health care reform. A major obstacle to reform is the
opposition of free-market idealogues who feel medical care should go to the
highest bidder.

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jgalt212
Is it just me, or does it seem apocryphal that it requires an 8X revenue jump
to get drivers to drive in the snow? To me it seems the market clearing surge
ratio during a snowstorm is around 3X. So is Uber being straightforward in
saying they are just taking their usual small cut (surge or no surge), or are
they taking their small cut and the distance between 3X and 8X as well?

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davidgerard
Why price gouging is rare, even though economists, libertarians and other
sociopaths love it:

[http://www.npr.org/blogs/money/2012/10/29/163861383/why-
econ...](http://www.npr.org/blogs/money/2012/10/29/163861383/why-economists-
love-price-gouging-and-why-its-so-rare)

tl;dr normal people with functioning empathy consider it grossly antisocial
and won't put up with that shit. If Uber wants itself regulated to hell, then
the CEO just needs to carry on in this style.

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brodney
It is also the past, for several hundred years now.

