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Showing posts from 2014

The Problem with "Surge Pricing"

Lisa Chow did a story for Morning Edition about Uber's "surge pricing". Similar articles have been written recently. They all raise the question about whether it's fair to charge people a fare for a ride that's higher than the originally advertised price.

(Adam Fagen on Flickr)
Now, "surge pricing" is ubiquitous. It costs me more to ride the DC Metro during rush hour than during the middle of the day. It costs me more money to drink a beer at the bar after 7pm than it does during Happy Hour. It costs me more to see a movie in the evening than it does in the morning. If I wanted to go to Las Vegas for New Year's, my hotel room would cost significantly more for the holiday than it would for the week following.

All of these are examples of adjusting prices to put supply and demand in equilibrium. Metro wants me to ride at off-hours to avoid overcrowding on their trains. The bar wants me to get there earlier and fill barstools rather than not go at all. …