Let’s Consider Uber’s Emergency Price Capping Policy

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• "Do you think it protects consumers from price-gouging, or artificially reduces the supply of Ubers on the road during high-demand periods?"

  Yes.

  But seriously, is there a reason that it has to strictly be just one or the other?

• Heh. Great point :)

  What would see as the "third way" alternative?

• It's not so much that I think there is necessarily a third alternative, so much as that not everything is only good or only bad. Most policies have both upsides and downsides. It's more complicated than just good or bad.

• Any thoughts on how we might measure or decide whether, on balance, such a policy is net good or net bad? What's your gut say?

• Well, good for whom? From Uber's perspective, it is presumably a trade-off between extra income and better PR. Though I suspect that they are better than me at figuring out what it good for them.

  For the consumer, I imagine that caps are good for two reasons (though I should note that I have never actually used Uber, so these are based on not very much information):
  1) I get the impression that with surge pricing a lot of the people who end up paying it were not being attentive enough and did not intend to pay that much for a ride. This makes this kind of pricing worse than mere price-gouging.
  2) I suspect that even if customers were properly alerted, that demand-elasticity is greater than supply-elasticity (otherwise it wouldn't take fairs quite so large in order to clear the market). If this is the case, it means that higher pricing isn't really alleviating congestion, it is merely making people pay more (though I guess it does mean that rides are going to people willing to pay rather than those willing to wait).

• I'll just add what's sortof my understanding of how it works:

  1) Above 1.3x surge (or something) users have to take 2 steps before they can catch a ride:
  -A big "N.Jx Fare!" thing comes up and you have to hit "I accept higher fare surge pricing"
  -After that, one must actually type in the multiplier in order to validate that you understand what you're getting yourself into

  2) The way I understand this is that drivers will set alerts on their phones to tell them if an area within X miles has a surge of Y or higher. The supply is definitely going to lag surges in demand--it's not clear to me whether it's fundamentally less elastic, though.

• Just something else to consider: My understanding is that the driver gets a portion of the total fare. So if we are talking about the ethics of increasing prices during a national emergency we should probably also consider the ethics of summoning an additional party (in this case, the Uber driver) into the midst of some disaster! Given these circumstances, I wonder if the price modifier is better understood as hazard pay, rather than true price gouging.

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