Historically, I would have said that taking taxis was fairly price inelastic. You knew it would be relatively expensive but you either didn't care or it was really the only practical way to get from Point A to Point B.
However, my sense is that for at least certain locations/demographics, that's probably changed with Uber/Lyft. I don't personally use them much but anecdotally a lot of people have started using them as an alternative to public transit or just because it's easier if they're going out for a night on the town. And I work with a lot of people for whom the reflex seems to be to pull out a smartphone anytime they need to go more than a few blocks while traveling. I expect those behaviors would change if the price suddenly went to 2X. (It also definitely makes a difference at the margins when renting cars and that's mostly a straightforward price calculation.)
It's actually the other way around: demand is said to be inelastic if changes in price have little impact on it.
Ugggh, yes, no matter how much I read about this stuff I will always get that backwards. I think I always mix it up because I think of the price tolerance being elastic instead of the demand being elastic.
very elastic use cases, like a ride home from the bar or a rescue from the rain
They manage demand via surge pricing, I thought. So is it really elastic?
They also manage availability by surge pricing. It not only discourages riders, but it also encourages more drivers to work.
I think it’s probably more like them capitalising on the elastic nature of the demand for these scenarios. Definitely an element of control as well though, as there is increased demand too (but it’s likely more elastic and therefore more tolerant to price increases).
But I feel like the Lyft/Uber mode of transport is generally more spontaneously and is therefore generally more elastic. Sure, there are undoubtedly some inelastic use cases, like regular commutes, but there are also some very elastic use cases, like a ride home from the bar or a rescue from the rain. I am definitely interested to see how the breakdown of these different use cases turns out to be, but for me and my friends and peers in the SF Bay Area, the latter use case definitely dominates.
https://en.m.wikipedia.org/wiki/Price_elasticity_of_demand