Uber Capping Prices During Snowmageddon 2015

An anonymous reader writes that yesterday Uber announced a cap on surge pricing during the mammoth snow storm hitting the northeast this week; there will still be surge pricing, but it will be capped at 2.8 times the usual fares. The cap comes after an agreement struck between Uber and the New York City Attorney General’s office in January 2014 that required Uber to limit prices during “abnormal disruptions of the market”, including emergencies and natural disasters. Uber also announced a national policy for its price limits during those emergencies. ... While Uber plans to limit dynamic pricing during this storm, the company has had a bad history with emergency situations and surge pricing. In late 2012, Uber received criticism for raising fares during Hurricane Sandy. (The agreement with the NY AG came in part as a result of Hurricane Sandy backlash.)

Comments

So what will this accomplish?

[weloytty]

The purpose of the elastic pricing was to make sure that there was always a nice supply of drivers. Cap the prices, and you won't have as many drivers available to drive you around in the snow. Econ 101, right?

Re:So what will this accomplish?

[bws111]

They could still pay the drivers more, without charging the passengers more, if they actually want people to believe they are only trying to help.

Re:So what will this accomplish?

[Anonymous Coward]

The purpose of the elastic pricing was to make sure that there was always a nice supply of drivers. Cap the prices, and you won't have as many drivers available to drive you around in the snow. Econ 101, right?

If that were the case, Uber would increase the cost and driver payment and decrease their slice (20%) so that they still make as much for providing the service but the driver/rider economics get better. Instead, they use it as an opportunity to make more money for themselves. It's still hard to say that Uber shouldn't be allowed to set prices however they want as long as riders are well aware.

Re:So what will this accomplish?

[bluefoxlucid]

They still need to eat, too.

Re:So what will this accomplish?

[bws111]

Who still needs to eat? The billionaire owners of Uber?

Re:So what will this accomplish?

[ShanghaiBill]

if they actually want people to believe they are only trying to help.

They are a business, not a charity. So no one should expect them to be "only trying to help". Even if they wanted to contribute some profits to charity, helping some investment banker get to his job on Wall Street by subsidizing his fare, probably isn't the most worthy of causes.

Re:So what will this accomplish?

[schlachter]

Nor will an individual be able to spend his/her way out of the snow. Even if he/she offers the Uber driver $500 to take him to work/doctor/etc, they will be usurped by someone with $30 because of a fare cap. Seems wrong of the government to interfere here.

Re:So what will this accomplish?

[Yebyen]

Correct me if I'm wrong, but in normal operation on a busy night you can see Uber prices surge up to 500% or more. If you want to see anti-gouging laws implemented like they have in New Jersey, where gas stations and service providers are not allowed to increase their prices during a disaster situation, go ahead and support Uber's right to surge pricing whenever they want it.

Uber has done this thing voluntarily to try and avoid that, or to try and make themselves look like gracious help-your-neighbor types, earning goodwill and getting exposure with good impressions or whatever. It's not like they've done away with surge pricing either, they've only capped it at 290%, which means again -- if they were a gas station or other essential service in New Jersey, they might be already running afoul of anti-gouging laws that do exist there.

Think of it from a risk management perspective, too. If you have the possibility of earning three weeks pay in two days just by going out to risk your life driving around strangers in the storm of the century, are you going to do it? Maybe every driver will! What if you had the potential to make only two and a half days worth of pay in the same amount of time instead? How bad is that storm supposed to get again?

Maybe if that's all you can make, you're gonna check that weather report again or look outside and think about it for a minute before you just sign on your car and open up shop today.

Re:So what will this accomplish?

[jellomizer]

Econ 101 yes. However during cases of emergencies, demand may not be rational, as the value of their currency is less than the value they are trying to protect.
If you are freezing to death and the only thing that can save your life would be using that check in your pocket for a million dollars, you would burn that check, in order to save your life.

In short during an emergency people need to focus on the short term and not the long term. So Supply vs Demand breaks down, as the value of money, is only as valuable as everyone agrees it is. However during an emergency, its value drops to the practical value of the paper,coin, plastic.

That is why there are anti-gouging laws. Because it isn't an aggregate rational supply and demand, but a mad rush for services.
Now for Uber and other services, Being their computers are not programmed to think in terms of an irrational market, they will just assume there is a perfectly rational demand jump so the prices will rise. The long term effect would be customers being felt ripped off will avoid such services in the future.

Re:So what will this accomplish?

[mi]

Who still needs to eat? The billionaire owners of Uber?

If they did not need or want to make money — commonly referred to as "needing to eat" in business vernacular — they would've retired to a sunny place long ago.

Fortunately, unlike with taxis, we don't need to decide for them — they have ample motivation to keep fighting for our wallets, hearts and minds or else the competition will come in and eat their lunch. Econ 101.

Re:So what will this accomplish?

[chrylis]

They are trying to make as much money as they can, and nothing else.

And they make money by ensuring that there are drivers.

Re:So what will this accomplish?

[Kryptonian Jor-El]

You need bread and milk? Sure, you need to keep the prices steady for all. You dont NEED a personal driver to drive you around during a snowstorm or hurricane, so you should pay out the nose for it.

Re:So what will this accomplish?

[bluefoxlucid]

That's not as magic as people want it to seem; but it is a force to be reckoned with. Do note that most goods are priced substantially above the minimum business viable price: there's huge mark-up on all kinds of shit, at all levels, even in markets with healthy competition. Apartments are practically divorced from price competition, for example, and tend to only shift prices with general demand (e.g. they get cheaper in a tough economy, they get more expensive when more middle class move to an area, but they don't become cheaper when more landlords own the same limited number of apartments).

Re:So what will this accomplish?

[mi]

Apartments are practically divorced from price competition

They aren't a good example, because they are the most massively-regulated thing out there (in the large illiberal cities).

they get more expensive when more middle class move to an area

That's perfectly natural — the price-rise is easily explained by the rise in "opportunity cost". The rental unit's continued existence as a rental needs to compete with the possibility of selling it for a nice lump sum and investing the money elsewhere.

Re:So what will this accomplish?

[Tom]

In Econ 101 you also learn about horizontal and vertical pricing.

Basically, if the surge price is reasonably high, most drivers will be available. From 1.0 to 1.5 you may raise the number of drivers considerably, but from 3.0 to 3.5 you will probably not motivate many more drivers to go out and drive - most available drivers will already be on the road, and the few who decide against it will not change their mind here because if 3.0 doesn't motivate them, then 3.5 most likely won't because they have important reasons to stay home.

A cap on such elastic pricing is almost always a good idea.

Re:So what will this accomplish?

[jellomizer]

Well if you live in a City. And you happen to be in a place where you cannot stay for shelter. Then you will need to be able to get to a place of shelter, your home, a hotel... If Cabs, Busses and public transportation isn't meeting demand, then you may need a personal driver go get you to the proper place of shelter.

Re:So what will this accomplish?

[Rich0]

Correct me if I'm wrong, but in normal operation on a busy night you can see Uber prices surge up to 500% or more. If you want to see anti-gouging laws implemented like they have in New Jersey, where gas stations and service providers are not allowed to increase their prices during a disaster situation, go ahead and support Uber's right to surge pricing whenever they want it.

What a surprise that during hurricane Sandy there were huge lines in NJ and it was impossible to buy gas there. Maybe if they allowed prices to float people would have reconsidered the importance of their trip, but anybody with a need to drive could pay the $20/gallon to drive, or at least easily obtain enough gas to drive to someplace where it was cheaper (you only need a few gallons to get to an area not impacted by the storm). Also, if prices were higher you'd see everybody with a tanker truck driving east to fill up and offering the gas for sale at a street stand, which would provide far more gas to the region.

Instead it worked a bit like the USSR. If you knew somebody you could go buy cheap gas from FEMA, and if not you either stood in line all day long, drove 150 miles yourself for gas, or went without.

Re:So what will this accomplish?

[Rich0]

If you are freezing to death and the only thing that can save your life would be using that check in your pocket for a million dollars, you would burn that check, in order to save your life.

If this were literally a matter of life and death then the national guard should be herding people onto trucks to get them out of danger, and shooting looters in the street.

Since the national guard wasn't around to give people a lift, maybe we should offer additional compensation to the folks who take the risk of getting into an accident so that you don't have to.

Re:So what will this accomplish?

[Wycliffe]

They could still pay the drivers more, without charging the passengers more, if they actually want people to believe they are only trying to help.

Why is this rated 5? Yes, paying drivers more *might* slightly increase supply but my guess is that the number of drivers is somewhat
fixed so without also charging passengers more you do nothing on the demand side. The point of demand pricing is to reduce demand
so that you don't overwhelm the relatively fixed supply. If your goal is to always have cars available, then increasing the price while
paying the drivers the same would actually be a better solution than increasing the pay while charging the same but that would also be
idiotic.
There are only two scenerios where increasing driver pay while keeping price the same makes sense.
1) If the supply drops because the regular drivers don't want to go out in the cold, etc.. and can be enticed by more pay.
2) There is a HUGE capacity of dormant drivers and Increasing the pay can cause alot of people who usually don't drive to decide to drive.

But my guess is that most of the time the reason the price goes up is because the demand is up. If the demand is
up then paying more on the supply side without also increasing prices on the demand side does absolutely nothing
besides making uber go broke.

Re:So what will this accomplish?

[LoyalOpposition]

Econ 101 yes.

Oh, good! You've studied economics and are going to make an insightful comment!

However during cases of emergencies, demand may not be rational, as the value of their currency is less than the value they are trying to protect.

Oh, crap. That didn't last long. The value of things is the basis of every voluntary exchange. If the exchange is for money, then the buyer values the money less than he values the thing he buys, and the seller values the thing he sells for less than he values the money he gets.

In short during an emergency people need to focus on the short term and not the long term. So Supply vs Demand breaks down, as the value of money, is only as valuable as everyone agrees it is. However during an emergency, its value drops to the practical value of the paper,coin, plastic.

Supply vs. demand doesn't break down! Supply vs. demand is still working the same as ever. The amount demanded at a given price is equal to the amount supplied at that price. If I have to buy a ride to save my life then I value the money the same as I did before, or nearly so. What happens is that the amount I value a ride goes up tremendously.

That is why there are anti-gouging laws.

No, there are anti-gouging laws because it costs politicians little or nothing to pass them and gains them much in terms of votes and donations. There are anti-gouging laws because the high price of rides during an emergency startles riders and fills newspapers, and people don't realize that the shortages in rides after the laws are passed are caused largely because of the anti-gouging laws. People blame greedy drivers or greedy grocers or greedy gasoline station owners and never seem to see the greed in politicians or riders or consumers. Of course I want a ride that I value extremely highly, and I want to pay with very little money. Of course that's not greedy. In fact, let me have everything and give very little in return. It's only because of all your greedy bastiches that I don't get it.

~Loyal

Re:So what will this accomplish?

[RabidReindeer]

The purpose of the elastic pricing was to make sure that there was always a nice supply of drivers. Cap the prices, and you won't have as many drivers available to drive you around in the snow. Econ 101, right?

You get a D.

Like a lot of things, "good enough" is often enough. It's not a straight-line or simple curve. Very few things in markets and economies are, despite the fact that many people are horribly prone to assume they are..

Maybe some people won't think that earning nearly 3x their normal fare isn't good enough, but I'll warrant a lot of them will.

Conversely, knowing that there's an upper limit on fares may bring in some people who'd otherwise not bother.

Re:So what will this accomplish?

[tlhIngan]

The purpose of the elastic pricing was to make sure that there was always a nice supply of drivers. Cap the prices, and you won't have as many drivers available to drive you around in the snow. Econ 101, right?

More like "don't piss off people".

More than one person has taken Uber only to be gouged in the end and realize that catching a regulated cab (who aren't allowed to charge more beyond what's posted on the pricing sheet) would save them half or more off the trip.

And considering Uber's business model seems to be to piss off as many people as possible, in the few areas where they've been allowed to operate it seems wise to not try to push one's luck and generate even more publicity that links them with the reasons why taxis were regulated in the first place!

I mean, news of people getting gouged from surge pricing is a nice soft story that'll make the nightly news and all over the web. And it'll associate rapidly "Uber == ripoff" in people's minds. Doesn't matter that they're normally cheaper or better than taxis, once people think Uber is a ripoff, that meme spreads far quicker than any effort to dispel the notion could.

And beyond personal safety issues, it was issues of gouging and markups that were the reasons taxis were regulated to begin with. Since Uber's business model relies on them skirting that part of the law, they don't want legislators getting wise to the history behind taxi legislation.

Re:So what will this accomplish?

[dunkelfalke]

I think you are confusing value and price. It is not the same thing at all.

Re:So what will this accomplish?

[wisnoskij]

It is a seesaw between reducing supply and letting all poor people freeze to death because they cannot economically compete with the rich.

Re:So what will this accomplish?

[nbauman]

The purpose of the elastic pricing was to make sure that there was always a nice supply of drivers. Cap the prices, and you won't have as many drivers available to drive you around in the snow. Econ 101, right?

Econ 101 has a lot of simple models that seem plausible. Then you have to go out in the world and see if the world actually works as you predicted. Or whether there's something you left out of your simple model.

Drivers want higher rates, but they also want higher volume. If you're one of the few cabs on the road, you'll spend more time carrying fares and less time cruising for passengers. So if they know there's a shortage of cabs, they'll get into their cabs and go out and make money. That's also Econ 101.

It's not that big a deal to drive in the snow, if you're prepared for it. If you're a cab driver (or any competent driver) you should be able to do it with no problems. There are lots of people who are willing to drive for $25 an hour or so, which is about what Uber and yellow cab drivers make. You don't have to bid them up to $75 an hour.

Re:So what will this accomplish?

[nedlohs]

"but they don't become cheaper when more landlords own the same limited number of apartments" - other than begging the question why do you think they would?

Re:So what will this accomplish?

[greg1104]

If this were literally a matter of life and death then the national guard should be herding people onto trucks to get them out of danger, and shooting looters in the street.

No, that only happens when people are protesting now.

Re:So what will this accomplish?

[smartr]

Just a thought experiment for you here involving gouging. Say there are 100 nuts available every month due to inherent tree production, and on any normal day of the year, the going market rate averages to $1. While production could increase, increasing production will take time and money where there will not be any sustained demand to make it efficient to do so. Suddenly, one day before a giant blizzard, all the squirrels go bat shit crazy and buy all of the monthly nuts in a single day. The bat shit crazy squirrels are not taking their $1 nuts and re-selling that at some higher price. In the immediate term, nothing is going to produce nuts out of thin air, not even higher prices. There are only 100 nuts. While raising the prices of the nuts to $500 a pop will make the nut vendors more money, it will not increase the supply of nuts. Will some poor lucky squirrel who got a $1 dollar nut sell his nut for $500? In the immediate short term, the value of said nut is worth just as much as anyone else is going to pay for it and it is not worth giving up. In effect, allowing price gouging in this scenario only encourages squirrels to buy more nuts and price gouge each other, but it serves no useful market purpose....

  Of course, these aren't nuts that can easily be imported to increase supply New York, these are Uber drivers. Price gouging only makes sense socially if it is viable and reasonable to increase supply to fill the demand. The fact of the matter is, after a certain price increase you're simply auctioning off scarce resources and rewarding hoarders.

Re:So what will this accomplish?

[ShanghaiBill]

You need bread and milk? Sure, you need to keep the prices steady for all.

Even price caps on bread and milk are generally a bad idea. The supply is very rarely fixed. If the price rises, bakers will work overtime to produce extra bread, thus alleviating the shortage. In the aftermath of Hurricane Sandy, gas prices surged, and tanker trucks full of gas started heading into the area from further west to take advantage of the profit opportunity. Then price caps were implemented, and the gas shipments diminished, exacerbating the shortage.

Re:So what will this accomplish?

[gnupun]

And they make money by ensuring that there are drivers.

Oh, there's going to plenty of supply of drivers if you charge a whopping $357 for 14 miles. What sane person would ride during surge pricing times?

You can rent a car for 3-5 days, with insurance, for that much money. Surge pricing is more about ripping people off when they need something the most than it is about maintaining a supply of drivers.

Re:So what will this accomplish?

[nedlohs]

They clearly are not confusing them. "If the exchange is for money, then the buyer values the money less than he values the thing he buys, and the seller values the thing he sells for less than he values the money he gets" is basically the text book definition of economic value after all.

Re:So what will this accomplish?

[ShanghaiBill]

A cap on such elastic pricing is almost always a good idea.

Exactly. Because otherwise some poor and vulnerable investment banker trying to get to his office, will be exploited by a rich and powerful single mom trying to earn extra grocery money by driving in a blizzard.

 

Re:So what will this accomplish?

[nbauman]

Or conversely, you should not be able to pay out the nose for it, and the driver will realize the risks and hazards of driving in the weather event, and will refrain from doing so, because the potential reward isn't worth it.

The risks and hazards of driving in bad weather are part of the job, and no big deal. If the risks were too great the police would close the roads. There are plenty of cab drivers who are willing to drive in the snow for $25 or $30 an hour. They have plenty of drivers driving snow plows.

And if there are hazards to driving in bad weather, who would you rather drive you -- a cab driver who's been driving in all kinds of weather for 60 hours a week, for 20 years, or some kid who's doing it a couple of hours a month in his free time?

Re:So what will this accomplish?

[Chirs]

Uber's pricing varies with demand, cabs don't. So if it's a busy time then you'll either pay more for immediate service with Uber, or else wait longer for a normal cab. It's up to the consumer.

Re:So what will this accomplish?

[Rich0]

Since the national guard wasn't around to give people a lift, maybe we should offer additional compensation to the folks who take the risk of getting into an accident so that you don't have to.

I'm sure your local police, fire department, national guard, and other emergency services accept donations. Those are your "folks who take risk so you don't have to".

Uber drivers are "folks who take risk so they might make a buck". They're a company. They're there to make a profit. Remember Adam Smith on how we get our bread.

I'm not suggesting that they're motivated by anything other than making a buck (though the reality is somewhere in-between - workers are motivated by more than money).

The thing is, I bet that even with the price caps Uber drove a whole lot more people home than the local police department did. I bet that if prices were higher they'd have driven more people home (after all, the goal of the algorithm is to charge the highest price possible while utilizing drivers 100%).

So, if you want to feel good then donate money to the police. If you want to get home, then offer to pay a driver whatever they feel the ride is worth.

Re:So what will this accomplish?

[John Jorsett]

They could still pay the drivers more, without charging the passengers more, if they actually want people to believe they are only trying to help.

If Uber were smart, they'd do just that in order to establish themselves as a reliable resource during emergencies. It would be good PR and also make it politically tougher for the local power structure to shut them down. Sure they'd lose money during crises, but they'd make up for it with a ton of revenue during normal operations.

Re:So what will this accomplish?

[Tom]

ROFL.

What a strawman. Which hypothetical investment banker will take Uber and what happened to his limousine and private driver?

Re:So what will this accomplish?

[Technician]

I'm old enough to remember capping gas prices in the 1970's where retail prices were held below wholesale. Anybody remember the days where stations had flags out? Red, out of gas. yellow, emergency services only, green gas available. Traveling to Idaho had a string of red. Parked in a small town and spent the night to await the truck in the morning. Most places tried to ration gas to a couple of dollars (couple of gallons) so you constantly drove from station to station instead of filling up. Lines for stations with gas circled the block.

For drives not wanting to risk car damage from driving in hazardous conditions, I can see where a lot of drivers will stay home that do not have chains or a high ground clearance vehicle.

Re:So what will this accomplish?

[Richy_T]

His driver hit a patch of ice and drove the limo into a snow bank.

Re:So what will this accomplish?

[LoyalOpposition]

Just a thought experiment for you here involving gouging...

That's a good question. Several things will happen. (By the way, I think some of your limitations are counter-factual, but whatever.) If surges in demand are frequent then it will pay speculators to put in a stock. Then when the surges happen they will release the stock, smoothing out the price fluctuations and gaining a profit from their efforts. Nut suppliers will receive increased demand (from nut consumers and speculators) and will respond by increasing production, admittedly long-term. Shippers will respond to the sudden price increases by going to Brazil and importing nuts from there. Pecan and hazelnut vendors will advertise the suitability of their products as a substitute for nuts, and some consumers will respond by taking the substitutes instead of insisting on nuts. Some of the less-suitable nuts (off-color, small) will no longer be thrown away but will be used by the nut-consuming public. Some of the nuts used for Nut-ella and other products will not be used for those products, but will be sold directly to the consumers in the form they are demanding. Nut users will use fewer, as in using five nuts in a chef salad from their former practice of using six nuts. Some nut consumers will decide that they don't desire nuts as much as they desire the money spent on nuts and will forgo the product.

~Loyal

Re:So what will this accomplish?

[Aighearach]

Which state is Illibera in, again? I'm not really understanding your point.

Is it...

1. I hate hippies
2. ...
3. Profit!

Re:So what will this accomplish?

[Wycliffe]

You guess? Well lets just throw out the Iron Clad Law of Supply & Demand, on which almost all of the worlds productive economy is based, because you guess.

I agree completely with the rest of your post. My "guess" is not about how supply/demand works.
My "guess" was that occasional short-term higher pay for drivers won't increase the supply much.
From what I've heard alot of uber drivers are either people who do it as a job or people who pick up
someone when they are going that way anyways. At only 3 times normal pay and only a temporary
price hike, you aren't going to see a huge number of people who aren't already set up to do it jump
in and start being an uber driver. You might get a few and longterm if prices stayed high then yes,
people would enter the market but in most areas especially labor the supply side is much less
elastic than the demand side so a price hike shortterm usually decreases demand much more
quickly than it increases supply. In some areas you can even see prices stay high for long
periods of time when the cost to increase production is expensive and noone is willing to invest
because they are scared the demand will drop before their investment pays off.

Re:So what will this accomplish?

[Aighearach]

And they make money by ensuring that there are drivers.

Oh, there's going to plenty of supply of drivers if you charge a whopping $357 for 14 miles. What sane person would ride during surge pricing times?

You can rent a car for 3-5 days, with insurance, for that much money. Surge pricing is more about ripping people off when they need something the most than it is about maintaining a supply of drivers.

I'll bet in a blizzard you could go door to door and get the ride for half that much, and in less time. Lots of people who would never drive for Uber, especially at the normal rates, would do it for under $200. I doubt you'd need to go to the third house.

Re:So what will this accomplish?

[Rich0]

But you did suggest they're doing this "so you don't have to", which has the connotation that they're doing us a favor. I'm pointing out they are only doing themselves a favor.

The whole point of a free market sale is that you're both doing each other a favor. You'd rather have a trip home than the money in your pocket, and I'd rather have the money in your pocket than the time/expense it takes me to give you a lift. It is a service industry even if it isn't charity.

Since we can't exactly force rationality into individuals, nor can we force buyers to not give their money away, the pragmatic solution is to limit what is considered a rational maximum price on sellers. If you as a buyer still choose to pay more, that's all you, man. Society already warned you.

How can a buyer choose to pay more if the government regulates the maximum cost of a ride?

Hey, if word gets out that people are willing to tip extra, you'll get your results of getting more drivers out there and more people getting home. So please, if you really believe what you're saying, go out there and leave those big tips yourself.

Tips are just part of the price if they're negotiated in advance. If they aren't negotiated in advance then they have no impact on the availability of the service. Nobody is going to go out in a storm hoping that somebody is going to be nice and give them a big tip.

Tipping after a service is rendered really doesn't make that much sense economically unless you're a regular customer (in which case you're really just tipping way before the next service is rendered, which is why it works). Having payment based on performance certainly makes sense economically, but only if both parties are bound by the agreement.

Re:So what will this accomplish?

[Aighearach]

Yeah, the prices would have to predictably high, or high for an extended period, for new drivers to actually sign up and be approved before those rates are gone. So the potential increase is near 0.

Driver "shortage" isn't a factor. So many people don't know anything about business, and just believe whatever they're told during the "business" unit of the TV news that it is about "Supply and Demand." But in this case, there is a surplus of supply, and the prices are set arbitrarily depending on whatever the market can bear.

There wasn't a shortage of drivers when it was just regular taxis, either.

If people spent the time to go into the weeds of the various local taxi rules and the legislative battles that led to current styles of regulation, they'd discover that the current rules are designed to prevent competitive pricing, while maintaining competition in other areas of service. This is because invariably, the downsides of the service quality that results from lowest pricing are rejected by communities. Driving isn't that hard, and if you let them, lots of people will offer the service for below minimum wage. Then there is increased criminality; too many drivers become pimps, drug dealers, etc. on the side, because they're not making a living wage. There are lots of ways to force taxis to pay well enough that a generic taxi is safe; the typical method is to set minimum rates.

People get really caught up in the maximum rates and neighborhood service requirements, because the heads on the TV told them to. But I encourage people to look at the complete regulations in any city. The actual theme of the regulations will become apparent.

Re:So what will this accomplish?

[Aighearach]

If you think the USA is a lot like the USSR, you probably just hate Freedom.

Re:So what will this accomplish?

[Aighearach]

The buyer and seller generally agree on the value of both the item, and the money. I think you misunderstood the concept of "demand." I'll give you a hint: it existed before money or economies.

Re:So what will this accomplish?

[Aighearach]

His driver hit a patch of ice and drove the limo into a snow bank.

Gosh, he can still access the office computers from his home office, and have the phone system forward his calls.

I don't see how getting in a car with a low income stranger is going to improve his already bad work day. And newsflash, nobody will be in the office anyways, it is almost impossible that it is better for him to be there than at the home office.

Re:So what will this accomplish?

[LoyalOpposition]

The buyer and seller generally agree on the value of both the item, and the money.

No. Buyer and seller agree on a price. It's not generally possible to know how much buyer and seller value either the item or the money.

I think you misunderstood the concept of "demand."

I'm pretty sure I don't.

I'll give you a hint: it existed before money or economies.

I agree that demand existed before money. Economics is how we allocate scarce resources that have alternative uses, so it's not possible for demand to predate economics. I tell you what--how about you spell out what I think demand is, and what it really is using a widely recognized definition from the science of economics?

~Loyal

Re:So what will this accomplish?

[stoborrobots]

... but anybody with a need to drive could pay the $20/gallon to drive...

That's quite a big assumption that everyone who supports the emergency surge pricing idea is making - that those who need the service will be able to afford the hugely-inflated price.

Re:So what will this accomplish?

[Aighearach]

So you presume that if we agree on the value of everything under the Sun, all trade will cease, and we'll just all lay down and starve to death because we are only willing to trade if we think we're getting a great deal?

For example, if you believe your income to be stable and sufficient for your needs, there is no need to value a sandwich more when you're hungry than when you're not. You only have to value it more when you're hungry if you're under resource pressure and worried that the availability is temporary. You also don't have to value a sandwich more than the money you would spend on it. The whole concept is irrational.

Even if there everybody agrees on value, there is still demand, because humans have real needs, and specialization is a thing. Trade is not based on presuming a lopsided value exchange, it is based on the reality of variable skills and availability of resources.

Economics uses all sorts of logical tools and technology that are not believed to be literally true or accurate; they're just believed to be useful in certain circumstances.

Demand obviously predated economics, because primitive trade isn't based on "how we allocate scarce resources." The most basic trade is just two people, without any system of allocation. Without systematic trade, there is no economy at all. Demand has to already be existent, and the concept of trading known, before an economy can develop.

As for defining "demand," just use wikipedia: "Demand is a buyer's willingness and ability to pay a price for a specific quantity of a good or service." Notice that nothing I say requires special, personal meanings for the words. ;) Without willingness and ability to pay, no economy could exist. Economic systems weren't invented by some guy who thought it up and everybody said, "oh, good idea" and started doing it. Barter existed for long periods before economies did. Many animals engage in basic barter, without any system of exchange or valuation. The trade has to exist before it becomes systematic, which is a requirement for it to be an economy. And an economy forms organically when there is sufficient trade. (as all things become systematic when repeated often enough)

Re:So what will this accomplish?

[bluefoxlucid]

People believe that more businesses mean more competition. I've had long, drawn-out arguments that centered around this ideal that a basic income or citizen's dividend, creating a ton of people with guaranteed income streams, would draw out tons of landlords, who would create tons of housing, and then rent that housing at the bare cheapest "because of competition".

I tell people a Citizen's Dividend must be the minimum to get all basic needs. Basically, if landlords can rent a micro-unit at $300/mo, and people need $300/mo more to get food and utilities and such to live, you give them $600/mo. People want to give everyone $1500/mo, to which I say: the landlords will raise rent like fucking crazy and rent you the same shitty $300 apartment for $1000 (like in New York: $1500/mo for 425sqft studio; 425sqft rents for $500 here), because people just have $1000 to burn, and need houses. The overwhelming response? "Nuh-uh! Competition! Other landlords will get in on that, and the price will run down to the same price it would be anyway! Giving people more money doesn't cause inflation!"

They fail to consider risks, inelastic markets, the extreme cost of having empty units, and so on.

Re:So what will this accomplish?

[LoyalOpposition]

So you presume that if we agree on the value of everything under the Sun, all trade will cease, and we'll just all lay down and starve to death because we are only willing to trade if we think we're getting a great deal?

Nope.

For example, if you believe your income to be stable and sufficient for your needs, there is no need to value a sandwich more when you're hungry than when you're not.

Sure there is.

The whole concept is irrational.

You think that because you misunderstand 'value.'

Even if there everybody agrees on value, there is still demand, because humans have real needs, and specialization is a thing.

It's not possible for everyone to agree on value because it's not possible to compare how much I value something versus how much you value that something. It's only possible to compare how much I value one thing versus how much I value another thing, and it's only possible to do that because of the exchanges you see me make. What it's possible for everyone to agree on is price.

Trade is not based on presuming a lopsided value exchange,

Sure it is. It's either that or coercion.

it is based on the reality of variable skills

Are you trying to discuss the Law of Absolute Advantage, the Law of Comparative Advantage, and Division of Labor?

and availability of resources.

Well, you're covering supply pretty well, but you're missing demand and, by implication, desires.

Economics uses all sorts of logical tools and technology that are not believed to be literally true or accurate; they're just believed to be useful in certain circumstances.

Agreed.

Demand obviously predated economics, because primitive trade isn't based on "how we allocate scarce resources." The most basic trade is just two people, without any system of allocation.

If Oog trades two beaver pelts to Moog for a spear and forty-eight grams of wheat, then the scarce resources that have alternatives uses is two beaver pelts, a spear, and forty-eight grams of wheat; and the allocation is a spear and forty-eight grams of wheat to Oog, and two beaver pelts to Moog. If someone, like, say, Loog, studies that then we have economics. Now, the actual study came after the exchange, but that's only because we can't study the future; we can only study the present and the past.

As for defining "demand," just use wikipedia:...

Ah! Then I didn't misunderstand the concept of demand, and you were wrong when you said I did.

Without willingness and ability to pay, no economy could exist.

Sure it can. If a mugger demands someone's wallet at gunpoint then an exchange has taken place and we can study it using the science of economics.

Economic systems weren't invented by some guy who thought it up and everybody said, "oh, good idea" and started doing it.

Sure it was.

Barter existed for long periods before economies did.

Bartering is one type of economic exchange.

Many animals engage in basic barter, without any system of exchange or valuation.

I wonder which economists study that.

The trade has to exist before it becomes systematic, which is a requirement for it to be an economy.

I think you misunderstand the concept of economics.

~Loyal

Re:So what will this accomplish?

[nedlohs]

None of that has anything to do with "Apartments are practically divorced from price competition" or why you used "they don't become cheaper when more landlords own the same limited number of apartments" as evidence for that claim.

Re:So what will this accomplish?

[bluefoxlucid]

The point is competition is a factor, but not a magic bullet. Be careful when invoking it, because it won't always happen that way.

Re:So what will this accomplish?

[Rich0]

... but anybody with a need to drive could pay the $20/gallon to drive...

That's quite a big assumption that everyone who supports the emergency surge pricing idea is making - that those who need the service will be able to afford the hugely-inflated price.

If people can't afford the price of things they need to live, then they should receive public assistance. The solution isn't to try to manipulate the market (unless it is subject to monopolistic behavior, or externalities, neither of which was the case here). Just mail everybody affected by the hurricane a check for $1000, and then let the price of gas be what it needs to be. Let the market operate efficiently, and don't try to use it as some kind of meals on wheels program.

Driving ban

[silas_moeckel]

Most of the affected area seems to have one.

Re:Driving ban

[Chrisq]

Most of the affected area seems to have one.

How does this work? I mean it makes sense that you could drive in an emergency (getting someone to hospital, etc). Could a Taxi service offer an "emergency only" service?

Re:Driving ban

[YrWrstNtmr]

Exactly. I hope that any driver...Uber, personal, licensed taxi, whatever...gets busted hard for driving around during those hours.
Keep your narrow ass at home.

Re:Driving ban

[silas_moeckel]

If it's an emergency that is what the ambulance is for. Sure you can take your own car it's not suggested.

At least around me fire and police are happy to give emergency workers a ride in. Hell even seen the plow guys do ti.

Re:Driving ban

[YrWrstNtmr]

Emergency. Police/fire/ambulance. Big flashing lights and all that. That is what those guys do. Not some Uber schmuck cruising around in his Prius.

Re:Driving ban

[omems]

At least in Manhattan, where the snow is rather unimpressive, it was really nice last night. Cold, sure, but essentially empty streets, other than a bunch of pedestrians. Since most businesses had already called off operations for Tuesday, it was like an adult snow-day.
I can't wait for the transfer booths to get installed, and we can permanently ban cars.

Re:Driving ban

[bws111]

Huh? NYC had a travel ban, as did Westchester, Rockland, Orange, Putnam, Duchess, and Ulster counties (at least).

Re:Driving ban

[ShanghaiBill]

Huh? NYC had a travel ban, as did Westchester, Rockland, Orange, Putnam, Duchess, and Ulster counties (at least).

Yes, you are correct. I misread the news report. It said that only Suffolk County's ban is still in effect, not that it was the only ban. All other county bans in NY have been lifted. NYC's ban has been lifed. Suffolk County's ban is expected to be lifted soon (if it hasn't already happened).

Re:Driving ban

[nbauman]

Most of the affected area seems to have one.

How does this work? I mean it makes sense that you could drive in an emergency (getting someone to hospital, etc). Could a Taxi service offer an "emergency only" service?

From what I heard on the radio, it sounds as if the cops will enforce the ban with discretion. If you're driving to the hospital in an emergency, they'll let you go. If you're a cop or a doctor getting to his job, they'll let you go. Otherwise, there's a fine of about $1,000.

Damn, nannies are hypocritical idiots

[A nonymous Coward]

They tax booze, tobacco, and anything fun, and raise tariffs, expressly to reduce demand. They subsidize whatever they want more of, to nudge people and to reward cronies.

Yet they think raising the minimum wage will increase the demand for low skill workers, they think wage and price controls will reduce demand and increase supply, they think capping surge pricing will increase supply and reduce demand, on and on the hypocrisy goes.

Just go away, nannies. Go away.

Re:Damn, nannies are hypocritical idiots

[bluefoxlucid]

The sympathy isn't for the poor, destitute, unworking American; it's for the hard worker who isn't making enough. We'd rather have 100,000 starving, jobless leeches and 20,000 upstanding, comfortable workers than 50,000 starving leeches and 70,000 struggling workers.

Re:Damn, nannies are hypocritical idiots

[ShanghaiBill]

Yet they think raising the minimum wage will increase the demand for low skill workers

Who is "they"? I don't think anyone believes the minimum wage will increase demand for workers. But there is empirical evidence that it doesn't cause much of a decrease, and less harm to employment rates than economic theory would predict. Increasing the minimum wage is still a dumb idea, because most minimum wage workers are not poor (they are secondary earners in middle class households). An increase in the EITC would be a far more efficient way to boost the earnings of low income households.

Re:Damn, nannies are hypocritical idiots

[beelsebob]

Increasing the minimum wage rather than the EITC has the benefit that more money is paid in taxes, not less. The result, not only are you able to help those who do have a minimum wage job (who by the way, typically are poor, and it's ridiculous to assert otherwise), but you're also able to help those who have found themselves out of work. That, and rebuild the completely fucked highways, pay firemen, stop the sewers leaking, ...

Re:Damn, nannies are hypocritical idiots

[A nonymous Coward]

You're obviously still very young.

Check out the UID. You need to rethink how ignorant and unobservant you are.

Re:Damn, nannies are hypocritical idiots

[A nonymous Coward]

You haven't been paying attention if you really believe " I don't think anyone believes the minimum wage will increase demand for workers." There are quite a few who believe exactly that. They seem to think that business owners throw all their profits into a pool like Scrooge McDuck so they can swim in it, and all the pay hikes will come out of those Scrooge McDuck pools.

Re:Damn, nannies are hypocritical idiots

[fuzzyfuzzyfungus]

That's an OK rant, I'd give it a C+, or maybe a nice solid B, because of the pernicious influence of the 'self esteem' movement and grade inflation; but you need to remember 'elasticity'. It's a fairly important property of both supply and demand.

It is undoubtedly true that many political policies(across the spectrum, or whatever the geometry of your preferred political metaphor is) are incoherent, largely because many individuals' own desires are internally inconsistent and, even where they aren't, they usually have to do some amount of compromising with competing goals in order to actually get something passed into law.

However, elasticity of supply and demand are major factors in considering the policies you mention:

'Sin taxes', on booze, cigs, hookers, etc. are designed to exploit elasticity in two ways: because kids tend to be fairly poor, since their labor force participation and share of capital gains are both low, they usually have very high elasticity of demand; their demand for a good will generally drop sharply, sometimes to zero, with even relatively modest price increases. Here, the 'sin tax' is basically a flavor of Pigouvian taxation, aimed at discouraging voters' children from doing things they don't want them doing. Among adult consumers(especially addicts, what great customers!), demand for sin goods tends to be inelastic, which makes taxing those goods a pragmatic revenue source, since the low elasticity of demand reduces deadweight losses from taxation and means that you won't reduce the number of sales you get to take a cut of by too much in taking your cut. So (while you aren't supposed to say it this cynically in public) 'sin taxes' are actually a pretty sweet deal: they are an easy sell, by tax standards; because they promise to curtail activity that voters dislike(thanks to the high elasticity side of the sin market); but they are also far better at revenue generation than standard Pigouvian taxation, thanks to the low elasticity side of the sin market, who will keep right on buying. It actually works pretty well.

In the case of minimum wage (aside from pure moralizing of the 'living standards below X are unacceptable per se' flavor), the assumption being made(exactly how accurately it is being made is arguable) is that what demand remains for low-skilled workers is actually fairly inelastic(which is less crazy than it might sound, since so much has already been offshored or automated, with the remaining demand mostly coming from people who need warm bodies on site in the US, or idiomatic native English proficiency, or the like); but that the bargaining power of low-skilled workers is approximately fuck-all, since the demand has plummeted from historical highs, and organized labor is nearly dead. If such assumptions are accurate(the second is definitely true, I don't really want to get into an argument about the first, merely to note that it is the assumption being made by those in favor of minimum wage increases), then it should actually be possible to increase the minimum wage without markedly reducing demand for minimum wage workers, since the employers who could make do with fewer(either through robots or China) have mostly already done so. Whether or not it is accurate, it is the operating assumption.

As for 'wage and price controls', I'm not certain what you are referring to. Nixon tried them, back in '71, as a counterinflationary strategy(outcome: unsuccessful) and more far-reaching measures were taking during the world wars; but the various regulations(local, state, national) that are wage or price controls of some flavor are rarely talked about in aggregate like that; and are a giant hodgepodge of various things.

Re:Damn, nannies are hypocritical idiots

[ShanghaiBill]

Increasing the minimum wage rather than the EITC has the benefit that more money is paid in taxes

Except that you are taxing the creation of low wage jobs. That is probably not smart policy. People are poor, not because of low pay, but because of NO pay. Most poor households have no earned income at all.

those who do have a minimum wage job ... typically are poor, and it's ridiculous to assert otherwise

Claiming that something is "ridiculous" does not make it untrue. Most minimum wage earners are not rich, but they are not poor either. Their average family income is $53k. Citations:

Very few minimum wage earners are the sole providers for a family
Typical Minimum-Wage Earners Aren’t Poor
most minimum-wage earners are young, part-time workers and relatively few of them live below the poverty line
Minimum wage myths

Re:Damn, nannies are hypocritical idiots

[ShanghaiBill]

There are quite a few who believe exactly that.

Can you provide a citation of someone that seriously claimed that a higher minimum wage would increase employment? I don't think that even Elizabeth Warren has gone that far.

Re:Damn, nannies are hypocritical idiots

[LoyalOpposition]

But there is empirical evidence that it doesn't cause much of a decrease, and less harm to employment rates than economic theory would predict.

The card and Krueger study used a seriously flawed methodology, as did many subsequent studies. They studied fast food places over two years. Fast food places that were created the second year weren't considered, and fast food places that went out of business the second year weren't considered. Since most businesses go out of business within two years of being started, this is a serious omission. Using the same methodology I can prove that no one was killed on death row. Send out a survey the first year asking whether you are still alive. Send surveys to those responding in the affirmative the first year to those same people the second year asking whether you are still alive. Discard non-responses. Voila! Capital punishment is de facto eliminated.

~Loyal

Re:Damn, nannies are hypocritical idiots

[Bill_the_Engineer]

Yet they think raising the minimum wage will increase the demand for low skill workers, they think wage and price controls will reduce demand and increase supply, they think capping surge pricing will increase supply and reduce demand, on and on the hypocrisy goes.

Wrong. They argue that by raising the minimum wage, we lower the amount of corporate subsidy in the form of welfare and medicaid. If they pay their employees a livable wage, we as taxpayers wouldn't be spending as much government money to make up for the difference. The idea they proposed was not to reduce the total unemployment, but instead the number of under-employed workers.

The money not spent on subsidizing the living standards of the minimum wage could (in theory) be used to subsidize new jobs by redirecting that money into actual job creation in the form of subsidizing job training and education or helping with start up costs for industry that serves the nation's long-term strategic interests.

Re:Damn, nannies are hypocritical idiots

[A nonymous Coward]

Someone else who hasn't bothered actually reading stuff written in support of minimum wage legislation. They make up all sorts of specious claims as to how employers really do have all that money lying around unused, or how the increased pay will spark improved productivity, or how employers will invest in more training for their suddenly-expensive employees .... yada yada yada. All so very simple, by their reckoning, and they are super smart and know so much more about how to run businesses than the actual owners and employers do.

Here's an interesting insight: If I knew of a simple way to make money that required so little investment, I could make a fortune doing so and help others in the process. Yet not a single one of these know-it-alls, these nannies who claim to want to help the poor and unskilled, is willing to put their efforts where their mouth is both make money and help the poor.

Not a single one.

I guess I know how much they believe in their own theories.

Re:Damn, nannies are hypocritical idiots

[Bill_the_Engineer]

Except that you are taxing the creation of low wage jobs. That is probably not smart policy. People are poor, not because of low pay, but because of NO pay. Most poor households have no earned income at all.

You are trying to subdivide the poor in order to push a solution that isn't necessary good. All poor households have low pay and this includes the ones with no pay. Creating more low pay households in order to reduce the no pay households do very little to help the population of poor households and instead continues the status-quo that benefit business at the expense of tax payers who have to fund government services that make up for the difference.

I would counter your argument by saying that if we reduced the total number of poor households with an increased minimum wage, even if we increased the number of no pay households in the poor household population the overall governmental cost would be lower.

Re:Damn, nannies are hypocritical idiots

[A nonymous Coward]

You aren't adept even at switching topics or changing tunes. Take up another line of work, sonny.

Re:Damn, nannies are hypocritical idiots

[Bill_the_Engineer]

Someone else who hasn't bothered actually reading stuff written in support of minimum wage legislation...

Your worst fear has come true. I'm reporting the arguments given by conservatives that support the minimum wage hike. They make very credible arguments about how not raising the minimum wage to match inflation is nothing more than a government subsidy to industry that only pay their workers the minimum wage (Ron Unz made the argument when talking about the minimum wage in California) .

Re:Damn, nannies are hypocritical idiots

[ShanghaiBill]

if we reduced the total number of poor households with an increased minimum wage

You are completely missing the point. Raising the minimum wage does NOT reduce the number of poor households, because most minimum wage earners are NOT poor. Increases in the minimum wage go mostly to households above the median. Meanwhile, the cost of the minimum wages mostly go into higher prices, especially for fast food, which is mostly sold to the poor. So the net effect is money being transferred away from the poor.

The EITC is far more efficient, because it targets only poor households, and the cost is not dumped onto the very companies that we should be encouraging to create more entry level jobs.

Re:Damn, nannies are hypocritical idiots

[mjwx]

You are completely missing the point. Raising the minimum wage does NOT reduce the number of poor households, because most minimum wage earners are NOT poor.

Yeah, good luck with that.

Countries that have a higher minimum wage have less poverty. Hell, counties in the US that have a higher minimum wage have less poverty than those with a lower minimum wage.

You are completely missing the point.

He didn't miss your point, he got it. It's just that your point is so horribly wrong its not funny.

Re:Damn, nannies are hypocritical idiots

[ShanghaiBill]

Countries that have a higher minimum wage have less poverty.

Countries that have a higher minimum wage also have far more generous welfare systems. So low poverty is correlated with a higher minimum wage, but not caused by it. America has a minimum wage of about 33% of the median wage. France has the highest, with a minimum wage about 60% of the median. America has less than 6% unemployment, while France has over 10%, and over 25% unemployment among unskilled young people.

Re:Damn, nannies are hypocritical idiots

[Aighearach]

LOL you just kept derping over yourself, and then when he laughed at you for it, you derped up some more.

Were you born like this, or are you just drunk? Did you know slashdot user IDs are sequential according to signup time? Did you know this isn't a new website?

It is almost as if you were born yesterday. But at least you had the twenty-five cents to buy "comprehension." Tell you what, I'll spot you another fifty if you promise to buy "unobservant" and "morosophy."

Re:Damn, nannies are hypocritical idiots

[Aighearach]

As in the real policy debate, you parrot the side that lies about the position of the other side. I don't believe you actually think that is the argument used to support minimum wage increases, because that would require being as old as you are and having never in your whole life listened to what anybody said about it.

Interestingly, the side accuse of just being unthinking morons are rather honest about what their "other side" say; they address the claims, and point to empirical evidence that increasing the minimum wage increases the size of the economy, because it doesn't reduce employment significantly, but it increases the pay of people at a wage scale where they spend their entire income every month.

It is well known that if a person at higher income, such as many business owners, make an extra 1% or 2% their savings rate goes up. This is well established. And if you give poor people a 2% raise, their savings rate stays at 0.

The economy isn't zero-sum. The more often the same dollars are spent/earned and respent, the larger the size of the economy. You can have an economy that is 10 times as large as another one that has the same number of dollars floating around. The rate of trade is the main thing, and poor people trade at a higher rate than rich people.

We went through all the doom-and-gloom predictions, and the lies about why we support increasing the minimum wage, in my State. And then we raised it over their objections, and the sky didn't fall. Actually the businesses they said would "go under" (like restaurants) got a boom; minimum wage workers who get a 5% raise will spend a lot of it at local restaurants. Minimum wage earners spend a larger percent of their income frequenting businesses that employ minimum wage workers than rich people, and yet, the business owners are still the same rich guys. The employers most affected by minimum wage increases are exactly the ones who benefit the most by it. However, they will still oppose it, because hating hippies is secretly more important to them than increasing their income.

Re:Damn, nannies are hypocritical idiots

[Aighearach]

Someone else who hasn't bothered actually reading stuff written in support of minimum wage legislation.

Lying about what we support and what the reasons we give are... is unlikely to persuade anybody to change their mind.

You don't support minimum wage increases, obviously, so you're not in a good position to tell the world what our position is. And you don't describe any part of the actual support; you describe the characterization given on right-wing media.

In my State we've raised the minimum wage numerous times over the past 20 years. Every time we hear the same doom-and-gloom, the same lies about what we believe. But the claimed negative effects offered by the opposed never materialize, and yet the claimed benefits by the supporters always do.

and they are super smart and know so much more about how to run businesses than the actual owners and employers do.

The effects aren't theoretical, some States really did increase our minimum wages significantly, repeatedly. The "business owner" group scored abysmally in their predictions of the outcomes. Which is good, they predicted the collapse of the economy, especially the (thriving) restaurant sector. It may be that their positions are more related to the propaganda of their chosen political teams than to any actual understanding of how their own businesses relate to the broader labor market. Which makes sense, they only participate in the labor market in a very narrow way, individually. Why would hiring and firing dishwashers give you any special insight into the broader outcomes from the local business community if the minimum wage changes? There is nothing in these business owners experience as business owners that would provide any special insight, other than comparing the outcome of the policy change to their predictions. And yet even though their predictions are consistently wrong, the same business owners make the same prediction each time we vote on increasing the minimum wage. And every time, their propaganda features a lot of words trying to convince people of lies about what the "other side" believes.

Re:Damn, nannies are hypocritical idiots

[Bill_the_Engineer]

You are completely missing the point. Raising the minimum wage does NOT reduce the number of poor households, because most minimum wage earners are NOT poor.

I completely see your point. You've skewed the statistics (actually repeated an argument made by the conservative Heritage foundation and the collection of political bloggers) to make it look like minimum wage doesn't affect the poor. The problem with your slight of hand is that its obvious that your argument falls flat when you realize that total population of minimum wage earners is not the same as the total population of poor households.

To put it another way... You are arguing that the plurality of minimum wage earners aren't poor, instead of the more applicable argument that the overwhelming majority of poor employed households are minimum wage earners. Your argument has the convenient side effect of ignoring the current problem with encouraging people off of welfare by getting a job that pays less than what they get by simply staying home.

Bad economics leads to bad policy

[Cytotoxic]

This move by the AG office shows a complete lack of understanding of basic economics. But I suppose it also goes to priorities. Is your priority to deliver services to people in need during major disruptive events, or is it to prevent people from having to pay high prices for goods and services during major disruptive events?

If you want people to be able to get supplies and mobility (via Uber), then you'd let prices find their own level. Nobody wants to be out running a car service in a blizzard. But if the price is right? Maybe you get in your SUV and go to work. Higher prices means more supply - until there is enough supply to meet demand. Then prices will fall again as demand wanes and supply increases.

If you need milk, bread, ice and water after a hurricane hits you could wait for FEMA to deploy and deliver while using the law to keep prices stable. Or you could let prices rise until it is worth it for someone with a big truck and a chainsaw for clearing downed trees to drive a load of supplies in from another state.

Politicians are going to respond to the outrage of "Price Gouging", which places the priority on price stability at the expense of delivering needed services.

Uber's model is to allow prices to find their own level. If there are not enough cars to meet demand, prices rise until there are. If there are too many cars chasing too few riders, prices fall until there is balance. This is the best way to ensure that service is delivered to those who need it, but it doesn't guarantee what the price will be.

Re:Bad economics leads to bad policy

[bws111]

'They' don't want people on the roads at all. The last thing they want is someone dimwit who says 'for the right price I will ignore the travel bans'.

Re:Bad economics leads to bad policy

[houghi]

Let the free market sort it out.
Let God sort it out.
Let Darwinism sort it out.

See? Everybody is against forbidding people into dangerous situations.

Re:Bad economics leads to bad policy

[XxtraLarGe]

This move by the AG office shows a complete lack of understanding of basic economics.

Have you ever considered the AG office understands exactly what they're doing, and prefer the negative consequences?

Re:Bad economics leads to bad policy

[CanHasDIY]

Speaking of prices, who pays the price when some untrained Uber taxi driver crashes during the emergency condition, causing emergency services to have to divert resources from where they are needed to handle the greedy idiot who crashed his car? The driver? Uber? Or does society pay for it, and thus have incentive to keep those morons from creating unnecessary dangerous situations in the name of avarice?

Re:Bad economics leads to bad policy

[Tom]

I'm sure all Uber drivers are responsible, altruistic people and they will only offer you a lift if they are in possession of specially equipped and certified snowstorm-safe vehicles.

Re:Bad economics leads to bad policy

[pedrop357]

I've always noticed that the same thing happens with necessities. People empty the shelves and resell them at a premium without any news stories about how greedy they are. Bottled water, fuel, canned goods, ice, etc. are all resold at a premium by those who go to the store first.

If a store could raise prices, or "gouge" as you call it, they could afford to pay drivers and shippers from farther away to do special shipments and ensure that the shelves stay stocked. I'd prefer this to facing empty shelves because I forgot to pick something up, or the effects of the disaster lasts longer than my supplies and I get to the store too late

Re:Bad economics leads to bad policy

[nbauman]

Nobody wants to be out running a car service in a blizzard.

I've gotten cabs in blizzards in New York City just like any other days. There are lots of cab drivers willing to drive in any weather for $25-30 an hour.

My friends from Michigan tell me that a major storm in New York City is like their daily commute to work in Ann Arbor in winter.

Re:Bad economics leads to bad policy

[nbauman]

There's no such thing as "price gouging".

If you don't like the price, don't buy the thing.

I love the pharmaceutical companies that sell their cancer drugs for $100,000 a year, and say, "This is value pricing. This is what your life is worth."

Even when the original research for the drug was done by academic researchers with federal government grants. Even when they sell the same drug for half the price to national health care systems in Canada, England, and other places where the government is a tough negotiator.

Re:Bad economics leads to bad policy

[nbauman]

This move by the AG office shows a complete lack of understanding of basic economics.

Have you ever considered the AG office understands exactly what they're doing, and prefer the negative consequences?

Or have you considered that the AG office understands basic economics and realizes that these claims of shortages unless we have surge pricing are bullshit?

Re:Bad economics leads to bad policy

[Cytotoxic]

Have you ever considered the AG office understands exactly what they're doing, and prefer the negative consequences?

Yeah, that was kinda the entire point.

Or have you considered that the AG office understands basic economics and realizes that these claims of shortages unless we have surge pricing are bullshit?

Yes. Yes I have. And that is without doubt one of the dumbest assertions of all time. Of course there are shortages. That is the entire economics argument. If there were not shortages, raising prices would not work. Your customers would just go to the competition. It is only when demand is inflexible and supply is short that prices spike.

When hurricane Wilma blasted south Florida there was no power for 2 weeks (minimum) for most of the bottom half of the state. Many millions of people were affected. Some folks were without power for over a month. You couldn't lay your hands on a generator anywhere. Demand went from a couple dozen a month per store to a couple thousand per day. Most stores were not open for the first week or so. There was no gas available because the service stations didn't have power to pump the gas.

We have laws against "price gouging". So guess what you didn't see? Tractor trailer loads of generators and portable air conditioners for sale in the parking lot. You did see huge lines for ice from FEMA.

Without price controls you would have been able to get gas if you needed it. You would have been able to buy a generator. You could have gotten ice. All at a steep markup. But you could have gotten it. But we had price controls. So you couldn't get it. Not at any price. And you couldn't drive out to go get it yourself, because you'd run out of gas before you made it far enough to be able to buy gas.

The supplies did show up at Home Depot.... eventually. You had to put your name on a waiting list to buy one. They sold every one before the shipments arrived. Since they had to charge the normal amount, they had to use their normal procurement and shipping procedures. If you turned them loose, how quickly do you think they could have gotten those things over here from China? You think they might have had a fleet of 747 cargo planes moving generators if they could have made $1,000 on each one? The inflexible demand only lasted 2-4 weeks. The shortage lasted for several months as pallets of generators arrived with each weeks shipment and were snapped up by people who lived through the horror of south florida without air conditioning and without a refrigerator.

A fair price is what a willing buyer will pay, and a willing seller will accept. Any other definition of "fair" is made up out of whole cloth. Price controls mean rationing. That is all. The choice is between some people getting what they want at a fixed price, but lots of other people doing without - or lots more people getting what they want but paying a lot more. There is no option for "everybody gets to buy what they want at the original price" when supplies are short.

only trying to help?

[schlachter]

It's a company. They are not in the "only trying to help" business. What company has ever done that? They're in the grow market share and make money business...by filling a need in society and adhering to local laws when needed.

Re:only trying to help?

[bws111]

Exactly my point. They are only trying to make money for themselves, and if exploiting a disaster make them more money, they will do that. Yet here we have people (like the OP) trying to claim that they are 'ensuring there are enough drivers'. Bullshit.

Re:only trying to help?

[LoyalOpposition]

Exactly my point. They are only trying to make money for themselves, and if exploiting a disaster make them more money, they will do that. Yet here we have people (like the OP) trying to claim that they are 'ensuring there are enough drivers'. Bullshit

Let me see...I can get out in this snow, go several extra blocks, pick up someone I don't know and drive them somewhere. I could get 2.8x. Or I could stay in next to this fire, drink this rum & coke, and call in 'sick' today. Screw it. Sorry, Uber--not available.

~Loyal

Re:only trying to help?

[Rich0]

Exactly my point. They are only trying to make money for themselves, and if exploiting a disaster make them more money, they will do that. Yet here we have people (like the OP) trying to claim that they are 'ensuring there are enough drivers'. Bullshit.

Free market pricing is desirable BECAUSE it ensures that there aren't shortages. That doesn't mean that this is the primary motivation of the participants in a market.

When you buy a smartphone you're not doing it to reward some kid for studying hard to become an engineer, but that is the result of your actions all the same. The smart kid isn't building the phone so that you personally can have one, but that is the result of his actions all the same.

All the benefits of a free market tend to be side-effects, but they're benefits all the same.

What is the alternative, capping prices and watching everybody stay home, so that you're stuck freezing on the side of the street when nobody wants to go pick you up?

Re:only trying to help?

[ranton]

Exactly my point. They are only trying to make money for themselves, and if exploiting a disaster make them more money, they will do that. Yet here we have people (like the OP) trying to claim that they are 'ensuring there are enough drivers'. Bullshit.

He said they are ensuring there are enough drivers, not ensuring there are enough drivers for a charitable reason. They are ensuring there are enough drivers to maximize revenue. Where did any of the parent posters try to make Uber out to be charitable in this situation?

Re:only trying to help?

[fuzzyfuzzyfungus]

Few companies have ever done that(probably not zero, I'm sure at least a few charities have been structured such that they count as 'companies' in legal terms); but any company with a PR budget has wished to appear (at least in part) to be doing that. Given the number and size of the world's PR budgets, I can only assume that a great many companies have wished to appear to do that.

I don't know how much Uber HQ values good PR, though given their zillion-odd entanglements in markets where they are dubiously legal, they probably should consider it; but if they do value it, the case to be made is pretty obvious:

Whatever Team Econ has to say about the wonders of equilibrium pricing and the joyous intersection of the supply and demand curves, it's pretty obvious that 'surge pricing' is not people's favorite aspect of Uber, especially during events that are seen as exceptional in some way(they scored some very acidic headlines during the Sydney hostage incident, as I recall). Even among people who reject economic moralizing, the existence of options markets is a convincing demonstration that people assign value to predictable prices.

On the other hand, it's also fairly evident that Uber's service will be less popular if it is seen as unreliable and more popular if people think of it as always delivering a ride on request.

If Uber wants to improve their image, they have the option of doing so by absorbing some or all of the conflict between these two aspects of their service in situations that would be likely to generate unpleasant attention otherwise. They don't have an obligation to do so(even if they did drop the facade of not being a taxi operation, taxi regulations largely focus on price not on obligating operators to operate at all times); but it is a fairly obvious way to buy more favorable opinion, which is something that profit-oriented companies routinely think is worth doing.

Re:only trying to help?

[AchilleTalon]

Exactly! Stop the bullshit about the motivation of the driver or Uber or whoever. You want a ride or not? If yes, take it, pay the price and shut-up. If the price it too high, less people will make money. Everyone at the end of the day is at the same thing: have as much money as he/she can. The rest is pure bullshit and marketing. "We-want-to-help my ass!"

Re:only trying to help?

[Bill_the_Engineer]

Neither of you needed to be on the road anyway.

Re:only trying to help?

[John Jorsett]

Exactly my point. They are only trying to make money for themselves, and if exploiting a disaster make them more money, they will do that. Yet here we have people (like the OP) trying to claim that they are 'ensuring there are enough drivers'. Bullshit.

In crises, you get rationing no matter what. If you don't regulate prices you'll get rationing thru price. If you do regulate prices, you'll get rationing thru scarcity. Putting limits on Uber means you deny some billionaire fat cat some money, but you also deny the people who really need a ride and are willing to pay for it the ability to get one. I'd rather have the latter system where I can get what I need and am willing to pay for, because I can always decide I don't need it that bad, but I can't conjure a car out of the air when prices are cheap but cars aren't available.

Re:only trying to help?

[d34thm0nk3y]

Let me see...I can get out in this snow, go several extra blocks, pick up someone I don't know and drive them somewhere. I could get 2.8x. Or I could stay in next to this fire, drink this rum & coke, and call in 'sick' today. Screw it. Sorry, Uber--not available.

Considering the blizzard, this is a good thing.

Re:only trying to help?

[schlachter]

Exactly my point. They are only trying to make money for themselves, and if exploiting a disaster make them more money, they will do that. Yet here we have people (like the OP) trying to claim that they are 'ensuring there are enough drivers'. Bullshit

No, he's claiming that capitalism...i.e. supply and demand...will ensure enough drivers as long as the sky is the limit on the rates that can be offered or charged. Putting a cap on rates will prevent that. His point has nothing to do with helping people...beyond the extent to which allowing supply and demand to take its natural course will help people meet their needs.

Re:only trying to help?

[trout007]

You make a profit in a voluntary market only by giving people what they want. Someone wants what you have more than they want the money.

It's people like AG that hurts people. There are people that would rather pay $100 to get home than pay $500 for a hotel room.

Re:only trying to help?

[rtb61]

Free market guarantees shortages that is it's function. What you are really saying is if you can not afford it, meh, fuck you, ha ha, die in the blizzard. That bullshit capitalist lie has to end, in the balance between need versus greed, capitalism is all about psychopathic greed and the bullshit propaganda that it comes wrapped in.

Re:only trying to help?

[Aighearach]

Regular taxi companies don't gouge anybody in a natural disaster. And in my community, when there is a disaster or disruption people work together to get through it, businesses that choose to stay open keep their regular prices, even if a hot meal might be able fetch a higher price when half the restaurants are closed. But gouging your customers in an emergency, just because you can, is not a required aspect of business, or even necessarily profitable in the long run.

Re:only trying to help?

[Rich0]

Free market guarantees shortages that is it's function. What you are really saying is if you can not afford it, meh, fuck you, ha ha, die in the blizzard.

Not being able to afford something doesn't mean that there is a shortage.

And I'm not suggesting people that can't afford a cab should die in a blizzard. Free markets and socialism are orthogonal. You can have either with or without the other.

If you're going to die in a blizzard, then call the police. They won't charge you to respond, and if we're talking a really big issue then the national guard should be bussing people out of dodge.

There is also no need to have poor people in a free market. You can give people a basic income so that they can afford food, and then let the prices reflect scarcity, so if there is a big chicken shortage the poor people can just switch to eating hamburger. You don't have to keep the price of chicken cheap and then watch as every store runs out of it anyway.

Re:only trying to help?

[LoyalOpposition]

Free market guarantees shortages that is it's function.

Shortages? What do you mean? If you mean scarcity, then scarcity isn't guaranteed by the free market. Scarcity is guaranteed by finite resources applied to infinite desires. If you really mean shortages, which economics defines as a lack of goods or services at the offered prices, then the free market comes closest to guaranteeing a lack of shortages. In fact, command economies do the best at producing shortages of the two types of economic organizations.

~Loyal

Re:only trying to help?

[rtb61]

The reality is of course wildly different. One person can afford a billion chicken meals while ten of thousands of other people can not afford their next meal. One person creates a chicken farm monopoly and hugely inflates the profit margins and thousands starve. So the typical diversion of capitalism call for help and shit fuck no, taxes, taxes, taxes, cant help, wont help, https://www.youtube.com/watch?... the poor should die, now that's the reality. It is not capitalism, it never was, it is psychopathic capitalism, created by a minority to feed their ego and lusts at the expense of the majority. A minority that demands to have more than they can ever consume regardless of how many others end up with nothing and that is with no limits upon how much more. In fact the more the psychopathic capitalist has and the less everyone else has the more it feeds that broken ego of the capitalist, that ego that is fed by people begging for charity and that charity being necessary because all the means for generating any income have been bought out, purposefully and this beyond any sane measure of greed, sheer insensate greed regardless of harm in fact fed by causing harm as a measure of power.

Look at the carnage of capitalism, wars for profit, bad pharmaceuticals, a polluted world, corrupted democracy, those are the real payout of the unfettered free market.

Re:only trying to help?

[Rich0]

That stuff isn't the result of the free market so much as the fact that we rely on the free market to address everybody's needs.

The free market is NEVER going to take care of a mentally retarded quadriplegic. That isn't a problem with the free market. The problem is with idiots who expect it to do so.

The solution is to just give everybody a basic income, or other social safety net. Leave the market alone. If people want to work for 5 cents an hour, let them. But, if they don't work they should still have food and shelter. Companies would quickly find that it is hard to hire people who are well-fed for the wages they offer the desperate.

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[account_deleted]

Comment removed based on user account deletion

Re:Criminals

[Agripa]

It would be simpler for the government to forbid the trade of goods and services during an emergency situation.

Uber needs to create a "win" scenario

[Ty]

Uber does a poor job with how they present their pricing. They need to reboot how they present it. You cannot just increase prices, no matter how justifiable it is, without feeling backlash from consumers, because this create a "loss" scenario for them, for which there is no "win" to contrast it.

Uber should increase their baseline pricing 400% and offer a 75% discount during non-surge/off-peak times. They should make sure the consumer is well aware of this whenever they ride. eg: "Fair cost: $80. Off-peak discount: $60. Amount due: $20" This is a win, and will be something Uber users feel good about for 95% of their trips.

During surge pricing, you remove the discount. Now this isn't a loss from a consumer's perspective - it's just "normal" pricing.

Re:Criminals

[pedrop357]

Cool, they can just live with fewer Uber drivers.

why is the cap a good idea?

[Chirs]

Hypothetically speaking, if I'm desperate to get somewhere, and I'm willing to pay *whatever it takes*, why is it a good idea to limit the surge pricing?

If raising the price from 1.0 to 1.5 raises the number of drivers considerably, what about raising it from 3.0 to 4.5? In both cases the price increases by the same multiplier.

Or what about having an auction system where each person that wants a ride indicates how much they're willing to pay for it? Would you want to cap that as well?

Re:why is the cap a good idea?

[Tom]

Hypothetically speaking, if I'm desperate to get somewhere, and I'm willing to pay *whatever it takes*, why is it a good idea to limit the surge pricing?

Because other people will pay for your desire.

Or what about having an auction system where each person that wants a ride indicates how much they're willing to pay for it? Would you want to cap that as well?

Economists are big fans of auctions and say that's the most fair method to distribute resources. Economists, however, are not known for taking social, cultural or human values into account in their simple models.

So yes, I would. Man, it really isn't so difficult. Get some history lessons on when and why the taxi business became regulated.

Re:If they really wanted to help

[nbauman]

They would randomly choose "zones" in NYC, and charge for surge pricing in some, and not charge in others.

Then they could provide data to tell us how the demand for Uber vehicles matched the supply.

My guess: you would see more demand than supply in the areas with no surge pricing. Which is pretty banal. What might be interesting is to see the magnitude of the difference.

The factor that limits the number of cabs on the street is not the willingness of cab drivers to work, it's the number of medallions the City issues. If they wanted more cabs, they could just issue more mediallions.

The main problem with that is that the (public) streets have limited capacity, and more cabs would cause more traffic jams, with the end result that nobody could get through the (public) streets. I know that every day at 6pm 9th Avenue is jammed with bumper-to-bumper traffic, and I can walk faster than a cab.

Re:Criminals

[mjwx]

http://www.deathandtaxesmag.co...

http://www.nationaljournal.com...

Price gouging, especially during an emergency situation, is illegal in many places. So basically what Uber is doing here is making themselves legally liable to return every red cent they collect over the normal rate during the snowstorm, not to mention inviting punitive damages.

This is a direct reaction to what they did in Sydney during the Martin Place Hostage Crisis. Uber was caught charging $100 for a ride that only cost $30 in a normal, licensed and insured taxi. Their response was "free market, so fuck you Australia". Whilst the world ignores this happening in Australia, they wont ignore it happening in NY.