The Morality of Surge Pricing
Russ Roberts

Basic economics in a free market are amoral. How or why surge pricing is implemented is irrelevant to the supply/demand relationship. Uber is not a charity, nor is it ‘public’ transportation. It is business. The market WILL bear what the market demands, and mandating additional requirements to regulate or inform on pricing eliminates the flexibility and freedom that draws drivers to Uber.

That said, Uber is part of the race to the bottom. As free agents, they undercut licensed taxi services, cutting profit margins that cut into the wages and benefits of licensed cab drivers. It is a contracting out of liability to the worker — with minimal extended benefit beyond the flexibility of it. In short, it is taking the professional taxi industry down by privatizing profits and socializing losses.

What does an Uber driver do when their car is involved in an accident that disables it? If they don’t have the money for repairs, they are out of a job, or should they get injured, they are on their own to have arranged appropriate insurance and or disability funding.

Uber, like outsourcing to another country without labor and environmental laws, is detrimental to the regulatory systems in place, and that is why it has been banned from numerous municipalities.

It needs to go away.

I am not involved in that business in any way for what that is worth. I see Uber as emblematic of the progressive culmination of the outsourcing and contracting in numerous other industries that have held wages down and benefits down, boosted profits for shareholders, and led to an erosion of service quality across virtually every industry.

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