This is basic market segmentation—charging more to people who pay more. Although I think rate regulation is a stupid idea, taxi rate regulation was designed to prevent exactly this sort of thing. (It’s also why taxis can’t compete “fairly” with Uber. They have to charge everyone the same all the time; surge pricing and price discrimination allows Uber to offset the cost of cheaper service for some people against increased revenues from other people.)
> It’s also why taxis can’t compete “fairly” with Uber. They have to charge everyone the same all the time
This is just not true. In many jurisdictions, it's the maximum price and the number of hack licenses that are regulated. In those jurisdictions, taxis could charge less than the "regulatory" rate, it's just that none of them do...because the taxi biz is about artificial restriction of supply.
The reason Uber can go lower for some customers is because it's going higher for other customers through surge pricing and higher up-front pricing for regular users.
Anyway, every major city (New York, DC, Chicago) I am aware of fixes rates and makes it illegal to charge some people less. (This is a very common feature of rate regulation generally: rates must non-discriminatory and non-preferential.)
I wasn’t referring to Uber. I am well aware of how and why their pricing structure works. There are jurisdictions outside the US however. For example, here in London black cabbies can charge less than the maximum, they simply never do.
Uber started as a pirate taxi company and has used enormous amounts of money, shady tactics, and market pressure to turn itself into a legitimate taxi company.
