Supply, Demand, Uber and Violence

Here’s how car service Uber deals with demand for their services:

When a lot of people are looking for an Uber car — like during a recent New York snowstorm, or Washington on New Year’s Eve — it sets the rate higher, in the hope of increasing supply, by enticing more of its drivers to come out or stay out. (Regardless of intent, the prices jump quickly, and from a user’s point of view, work more as a form of demand-limiting price discrimination than supply-inducing incentive.)

During a recent New York snowstorm, some rides cost 8.25 times the standard price.

Emphasis mine.

Here’s how French cabbies deal with demand for the same kind of service:

“Smashed windows, tires, vandalized vehicle, and bleeding hands,” passenger Kat Borlongan said on her Twitter feed, describing what happened after an Uber car picked her up at Charles de Gaulle Airport (aka Roissy Airport). “Attackers tried to get in the car, but our brave Uber driver maneuvered us to safety, changed the tire on the freeway, and got us home,” she said.

Two other cars, booked through the local Chauffeur Privé service, were targeted in similar attacks near Orly Airport and the Montparnasse train station. “Eggs and stones were thrown, and there were violent blows that broke the cars’ windows and rear-view mirrors,” Chauffeur Privé said in a statement.

Tensions between cabbies and Uber have been brewing for months. At the request of taxi drivers, the government recently imposed a new rule on private services requiring a minimum 15-minute wait between the time a car is booked and the passenger is picked up.

Which one of these is more peaceful? Which embraces openness, honesty and respect for our fellows?

Price Controls Are Bad

Economists often disagree. One subject on which there is near universal agreement is price controls. They’re bad. Price controls stifle innovation and punish consumers. In Washington D.C., a company called Uber has been offering upscale transport that competes directly with taxicabs. Uber says a new service they want to offer may well be outlawed tomorrow by the D.C. City Council:

On Independence Day, Uber announced a roll out of a lower cost service that we call UberX. A less expensive Uber option on an all-hybrid fleet. We’re pretty excited about it and think it’s a great idea for cities across the country. What some of you probably noticed is that there was no roll out of this service in the District. That is because, only days earlier, the DC City Council informed us that they intended to pass an amendment to the taxi modernization bill that would make it illegal for Uber to lower its prices or to offer a low cost service in any form.

Uber claims the city council wants to force them to offer this new service at a minimum price of five times the price of a comparable taxicab ride. They’re calling this language the “Uber amendment.”

This kind of effort by local officials to protect incumbent businesses isn’t unprecedented. The Institute for Justice has done a great deal of work challenging exactly these kinds of price controls in other cities. I wouldn’t be surprised if they jump in here, as well.


The D.C. City Council may vote on the amendment tomorrow. Uber would like it if D.C. residents who care about competition in transportation services called their representatives.