The idea is a rich guy can still quickly get to the beautician during a disaster. He's earned this right and is basically just cashing in on years of hard work skimming off the top of workers's 401K trading fees--these workers were forced to select from a few mutual funds chosen based on family ties with the executives, but he worked damn hard to be born to the right board member.

Highest bidder would work great and allow excellent prioritization if everyone had roughly the same means. This is a bit like economist worship of the Coase Theorem--it completely falls apart when you factor in marginal utility of additional dollars to individuals at different levels of wealth.

No, that's not the idea. If surge pricing was in effect all the time --- if travel pricing was always an auction and drivers were kept scarce to keep prices up --- then Uber rides would be a service for the rich. But disasters are rare, and the surge multiple is merely the equivalent of several Uber rides instead of one. Meanwhile, the alternative to surge pricing is a high likelihood of not getting a ride at all, because disasters suppress demand. It's hard to see the class-warrior logic in this situation.

(Later, you edited your comment)

It's a caricature to suggest that "Coase" is, to economists, a license to apply the free market to every public policy problem.

Meanwhile: you have to actually make the case that there's a distributional problem with surge pricing for Uber rides. If the alternative is no rides at all, then surge pricing makes some people --- not all of them rich --- better off while making nobody worse off.

Yep. Instead of "expensive Uber rides" during a snowstorm, you get "no Uber rides." (A shortage, in other words.)

Thanks, Albany! Well-done.

If rich people getting more stuff bothers you then take money away from rich people and give it to poor people http://en.wikipedia.org/wiki/Basic_income don't try to solve the problem from scratch with each category of stuff, that just leads to price-distorting crap like we're seeing here.

I didn't try to solve anything; basic income, zero income tax, zero investment tax, highly progressive consumption tax -- that's my my current ideal but unfortunately a progressive consumption tax isn't very workable.

You're attempting to compensate for an external inequity (some people are rich, some for reasons not pertaining to their own merit) by reducing the availability of a scarce resource in favor of mandating a free-for-all that will occasionally benefit a lucky lower income individual.

This is, unfortunately, one of the most inefficient and expensive ways to institute social reform. It is also being applied to a system for which there is also a far more regulated counterpart in the taxi system. Except, guess what? Dispatch says you won't be getting a cab for hours because they're already booked.

This argument is pretty disingenuous. Some wealthy individuals were born into very privileged families and some poor people remain poor due to exploitation, but that certainly does not apply universally.

>Highest bidder would work great and allow excellent prioritization if everyone had roughly the same means.

I'm not sure why this system only works well when everyone has the same means. As the article points out, a price increase for a good or service can actually incentivize people to increase supply (people who initially decided to take the night off from driving now decide to work in order to cash in since demand is high). In other industries this can lead to more competition and innovation as well.

>Some wealthy individuals were born into very privileged families ... certainly does not apply universally

Sure I agree--like the guy who came up with processing debit transactions in order of dollar-amount instead of in order of transaction-time when calculating overdraft fees.. like that guy probably got a huge bonus for coming up with the scheme, and he probably didn't get the idea from his grandpa's will.

I sympathize with the resentment of those who got unfair advantages from exploiting others, but preventing goods from being economized based on price signals entirely is not the right response.

From the fact that some wealth is unjustly acquired, it doesn't follow that we should expect everything to cost the same and be allocated by queuing.

An actually rich guy will just call his driver.

> it skews heavily towards the wealthier

I'd say it skews heavily toward those with the greatest demand, as the previous post said.

If you have average financial resources and needed to get to the hospital in the middle of a snowstorm, you stood a better chance under Uber's previous model that allowed a market-clearing price. Now that some NY politicians have outlawed that process, the price that they permit will be below the market-clearing price and the likelihood of shortages will increase. Put another way, Uber drivers will (sensibly) venture out in snowstorms only if they can make significant $$$.

Hope you're well enough to walk to that hospital! Thanks, Albany!

(Note I'm not an interested party here: I own a late-model car, I don't live in NYC, and I've used Uber and similar services < 5 times this year. But someone was wrong on the Internet and clearly needed to be corrected.) :)

Yeah this

   it also allows you to be sure that you will be able to get a taxi on New Year’s Eve 
   as long as you’re willing to pay extra. 

was already possible. But "extra" here doesn't mean a few bucks, but a shitload of money. You could already hire a personal driver, if you were willing to pay for it.

You have a good point, but is there a problem with it being more available to wealthier people?

Everything else being equal, say person A watches Breaking Bad for 7 hours and works for 1, having less money in pocket compared to person B who worked 8 hours that same day. Should both people have equal spending ability?

Do you honestly think that poorer people are poorer because they sit around watching Breaking Bad all day? Have you perhaps ever met someone who works hard at three jobs at minimum wage and can't make ends meet, especially in an incredibly expensive city like NYC? I mean what planet are you living on?

In most parts of society, wealth has little to do with the time spent working.

There might or might not be a moral case for this. But to say that this allows the market to act like Marx's utopia of to each according to their need is not only wrong, but a lie anyone with the minimum one week in an undergraduate economics course should see.

But this is true even without surge pricing.

Richer people can afford more stuff, more news at 11.