As an economist, I applaud Uber’s ability to adhere to the law of supply & demand.
As a customer, variable pricing for a taxi/car service is not something that usually happens and is a pain in my ass.
Unfortunately, I understand that Uber’s surge pricing is their method to ensure cars are available to all who want them, especially during two troubling situations, winter weather and party hopping.
Everyone wants a car during these times, and if Uber didn’t raise the prices, Uber would be no better than a taxi company. Meaning we would have to wait—potentially forever—for a car.
Instead, these higher than usual prices keep cars on the road during the snowier and busier than usual times.
Most companies institute surge pricing. Think: evening movie tickets are more expensive than an afternoon movie. Want to understand the logic? Here is an overview from the Washington Post.
Remember, it is always free to walk!
(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)