Why do so many people on this board think that mockery substitutes for a valid argument?
During a national disaster, creating more supply is impossible. So that goal of raising prices is gone. And reducing use can be accomplished by rationing. So there’s still no reason to increase prices and make the brunt of the problem being felt by the poor while making sure the rich still get service. And you also don’t get companies profiting off the disaster.
Broomstick is pointing out an extreme in order to show that completely unregulated surge pricing will not work. And you guys making fun were perfectly fine with that line of argument when she first brought it up.
I’ll give you an example. Way back when, there was a massive Ice Storm in Rochester, there was a complaint that one of the only operating stores after the storm (a Wegman’s, I believe) jacked up the price of batteries.
Let’s examine the impact of a price change vs. rationing vs. no price action:
No Action: Everybody walking into the store buys a bunch of batteries, just in case. Batteries are all gone in about 1 hour. Everyone who walks in later is Shit Outta Luck, and it doesn’t matter if the batteries would be used for a videogame or an insulin pump.
Rationing: Shoppers are allowed X batteries, and no more. Everyone buys how ever many batteries they are allowed to buy, just in case. Batteries are all gone in about 3 hours. Everyone who walks in later is SOL, everyone who actually needed more than X batteries is SOL.
Ideal High Pricing: Prices are far higher than normal. Nobody buys batteries “just in case” because they’re too expensive, even the wealthy, since nobody ever got rich overpaying for something they don’t even need. People who really need batteries, for whom buying new batteries is critical for their comfort/survival find that there are still batteries on the shelves. Even the poor can get batteries, though they’ll be forced to prioritize their spending differently. Perhaps not everyone with a need gets batteries, but far fewer will be sold “just in case”.
Granted, the destitute are going to be SOL, because despite their need they don’t have the money to pay a high price. However, in the immortal words of Al Bundy “What place doesn’t suck when you’re broke?” I also think that, overall, society is benefitted by having critical resources available for those who truly need it, rather than enforcing “justice” in a way that results in the resource being given to those who need it far less.
The disaster situation is fundamentally different than the surge pricing situation. In a disaster, the point is that supply is impossible to be increased and the increased local prices that those that do have supply end up being able to charge do not in any way help encourage people to increase the supply. Those that are lucky enough to be in the market will walk away with a load of economic profit due to having the right goods and the right time and place. The only good thing you might be able to say is that it encourages suppliers in general to carry items that are highly desirable in emergencies that normally are not with the anticipation of making that large profit in dire situations, thus contributing to their availability when they are needed. Unfortunately, the things that tend to be in short supply are precisely those that are routine staples of existence that continue to be needed in the aftermath of a disaster whose resupply to typical suppliers becomes impossible. The market power of the suppliers is increased through their effective monopoly, enabling them to extract all the economic profit possible from consumers. Still, some might say this is a good thing overall in being able to efficiently determine the distribution of scarce resources, but such a thing implies that people have large pools of wealth to draw from and are not facing a survival crisis. Economic theories tend to break down when people are faced with just not having the resources to maintain their existence. This is one of the reasons why capitalist health care systems are not quite the best idea; when it comes to survival, the cost becomes irrelevant and the suppliers always have market power.
In surge pricing, especially in cases where there is a regularity in how prices change with time, suppliers can know ahead of time when they can enter the market such as to benefit from the increased price. This is theory pushes prices down slightly, and theoretically an equilibrium is reached where those willing to offer their service at the price known to be offered at any given time will exit the market if the price goes any lower, nudging the price slightly upwards. The same is true for consumers; if prices are high, they’ll find alternate means, lowering prices and tending to equilibrium. Those that are on the verge of entering or leaving the market are theoretically making no economic profit, while those that would be willing to participate in the market at more favorable prices do. It’s very nearly the best example you can get of a perfect supply and demand model.
I don’t understand why the solution to all of these apparent shortcomings to Uber is to ban them.
If I hire someone to drive me somewhere, there’s a possibility that I might be raped, so the solution is to ban me from hiring someone to drive me somewhere?
Sometimes at peak usage periods Uber jacks up prices, so the solution is to ban me, a consenting adult, from hiring another consenting adult to drive me somewhere?
Uber might not be able to evacuate me from a hurricane, so the solution is to make Uber illegal?
If Uber was as terrible as people say they are no one would use them or drive for them, so why would there be a need to ban them? I can’t afford to hire a helicopter to fly me to the store, so obviously all helicopter hiring services should be banned right?
It’s almost as if Uber’s opponents are more interested in shutting down Uber than they are in protecting me from rape and hurricanes.
try “Uber lies about what it is to try to skirt the regulations imposed on taxi services, and the options are 1) get them to work within the regulations, or 2) tell them they can’t operate here.”