Uber Reverts Back to Surge Pricing in New York After One Day • Hacker News Board

Re: Uber Reverts Back to Surge Pricing in New York After One Day

#61

Post by pyre » Thu, Nov 01, 2012, 9:23 PM UTC

gwright wrote: post #45

codewright wrote: post #12

Earlier quoted context omitted.

>Can you elaborate? Does he want to remove the anti-"gouging" laws? Quite the opposite, he's a somewhat populist moderate Republican. He plans to prosecute people guilty of increasing their prices more than 10% during the crisis to full extent of the law.

This is perhaps good politics, but it is stupid economics. Restricting price changes during a crisis (or any time really) is a fantastic way to create shortages, delay the arrival of needed or substitute resources, encourage hording, and so on.

Do you really think that raising (e.g.) gas prices by a large margin will somehow redirect resources to getting more gas into those areas?

* The gas stations without electricity aren't to get electricity any fast because the price of gas is higher.

* Gasoline shipments aren't going to come any faster.

* New gas stations aren't going to pop up as entrepreneurs move into the area to capitalize on increased demand for gas.

A disaster isn't necessarily a 'market force.' No one is going to get supplies into a disaster zone faster because they are trying to turn a quick buck. Especially since it isn't like they can setup shop and expect the increased prices to persist.

Re: Uber Reverts Back to Surge Pricing in New York After One Day

#62

Post by ddlatham » Thu, Nov 01, 2012, 9:40 PM UTC

eru wrote: post #52

ddlatham wrote: post #18

Earlier quoted context omitted.

Even if there is no additional supply available, there still could be some benefit. If the price of gas were far higher, people may not fill up their tank all the way and only purchase what they really need. So instead of the first X people getting full tanks and the next Y people getting nothing from an empty gas station, in some scenarios everyone could get a smaller amount. However, the issue of poor people not ha…

Yes. But don't give people gas money. Just gives them money.

Agreed. I say "gas money" above so people envision the poor being able to pay for the gas at high prices, but the whole point of keeping it based on taxes and currency is so that the market can balance between alternatives besides buying gas as well.

Re: Uber Reverts Back to Surge Pricing in New York After One Day

#63

Post by jlgreco » Thu, Nov 01, 2012, 10:04 PM UTC

pyre wrote: post #61

gwright wrote: post #45

Earlier quoted context omitted.

This is perhaps good politics, but it is stupid economics. Restricting price changes during a crisis (or any time really) is a fantastic way to create shortages, delay the arrival of needed or substitute resources, encourage hording, and so on.

Do you really think that raising (e.g.) gas prices by a large margin will somehow redirect resources to getting more gas into those areas? * The gas stations without electricity aren't to get electricity any fast because the price of gas is higher. * Gasoline shipments aren't going to come any faster. * New gas stations aren't going to pop up as entrepreneurs move into the area to capitalize on increased demand for g…

Raising prices will reduce the amount of gas people are willing to put into their cars when they finally do pull up to a working pump. If more people only fill up partially, then more people will be able to make due for a time.

Re: Uber Reverts Back to Surge Pricing in New York After One Day

#64

Post by fr0sty » Thu, Nov 01, 2012, 10:09 PM UTC

jlgreco wrote: post #40

barrkel wrote: post #35

Earlier quoted context omitted.

The correct response to a fixed supply of water is rationing, not either fixed or floating prices. Because without water you die, or catch diseases from poor substitutes. With a fixed price, whoever comes in first gets the most water; laggards die. With a floating price, whoever has the most money gets the most water; poor people die. Neither of these is morally superior. IMO.

I suspect water could be considered a special case, since it is so immediately necessary. What if, instead, we were talking about bread? Assuming that rich people are fairly rare, then raising the price of bread high enough to be expensive but not so high that people cannot pull enough cash out of their pocket to pay for it, then the effect seems to me like it should be an approximation of a ration. Clearly if Donald…

But water is not really a special case, though.

Tap water is nearly free and bottled water is >$1/gal. so the markup during a disaster is >100x.

Re: Uber Reverts Back to Surge Pricing in New York After One Day

#65

Post by fr0sty » Thu, Nov 01, 2012, 10:14 PM UTC

pyre wrote: post #61

gwright wrote: post #45

Earlier quoted context omitted.

This is perhaps good politics, but it is stupid economics. Restricting price changes during a crisis (or any time really) is a fantastic way to create shortages, delay the arrival of needed or substitute resources, encourage hording, and so on.

Do you really think that raising (e.g.) gas prices by a large margin will somehow redirect resources to getting more gas into those areas? * The gas stations without electricity aren't to get electricity any fast because the price of gas is higher. * Gasoline shipments aren't going to come any faster. * New gas stations aren't going to pop up as entrepreneurs move into the area to capitalize on increased demand for g…

> The gas stations without electricity aren't to get electricity any fast because the price of gas is higher.

If you can sell gas for $10/gal then it becomes worthwhile to get a generator and start pumping gas.

If you can't sell gas at a premium you won't bother.

You could say the same for anyone with a truck that has a bulk tank. If they could go house to house selling gasoline at a premium you can bet good money people would be trucking in thousands of gallons of fuel for generators. But that's price gouging so everyone goes without...

Re: Uber Reverts Back to Surge Pricing in New York After One Day

#66

Post by jlgreco » Thu, Nov 01, 2012, 10:38 PM UTC

fr0sty wrote: post #64

jlgreco wrote: post #40

Earlier quoted context omitted.

I suspect water could be considered a special case, since it is so immediately necessary. What if, instead, we were talking about bread? Assuming that rich people are fairly rare, then raising the price of bread high enough to be expensive but not so high that people cannot pull enough cash out of their pocket to pay for it, then the effect seems to me like it should be an approximation of a ration. Clearly if Donald…

But water is not really a special case, though. Tap water is nearly free and bottled water is >$1/gal. so the markup during a disaster is >100x.

I only consider water a (potential) special case because it is one of the few things that, in the event that it really is unavailable, people will start dropping dead pretty quick.

Bread, fuel, generators, etc... these are all things we can afford to be relatively dismissive of and just say that price caps are unneeded/bad. That may also be the case with water, but I don't feel comfortable saying that with my limited knowledge.

Re: Uber Reverts Back to Surge Pricing in New York After One Day

#67

Post by fr0sty » Thu, Nov 01, 2012, 10:48 PM UTC

jlgreco wrote: post #66

fr0sty wrote: post #64

Earlier quoted context omitted.

But water is not really a special case, though. Tap water is nearly free and bottled water is >$1/gal. so the markup during a disaster is >100x.

I only consider water a (potential) special case because it is one of the few things that, in the event that it really is unavailable, people will start dropping dead pretty quick. Bread, fuel, generators, etc... these are all things we can afford to be relatively dismissive of and just say that price caps are unneeded/bad. That may also be the case with water, but I don't feel comfortable saying that with my limited…

Fair enough. My point is we balk at a 200% increase in the price of gasoline but won't blink at a 100000% increase in the price of water.

Also consider that @ $1 per 16oz bottle you are paying $8/gal for essentially tapwater that was bottled and driven in from out of state. But try to sell a gallon of gas for $5 and you are some kind of monster...

Re: Uber Reverts Back to Surge Pricing in New York After One Day

#68

Post by 001sky » Thu, Nov 01, 2012, 11:09 PM UTC

tptacek wrote: post #59

001sky wrote: post #41

Earlier quoted context omitted.

Gas in NY metro simply is more valuable now The amount you are willing to bid on something under duress is not the way to construct a proper-functiong market. Its important to seperate the short-term from the long-term, in this regards. In certain cases, its rational to obviate the market, into hierachy. see, for example: http://en.wikipedia.org/wiki/Hold-up_problem . This is precisely why firms are distinct from N-d…

I don't think you read my original comment. I think you skimmed it, concluded that I was arguing for abolition of all price caps to allow "free market capitalism" to solve all our problems, and wrote a philosophical response. In fact, I don't believe we should abolish all price caps. I simply think the cap we've chosen is foolishly low. We have empirical evidence that a dense western urban area can survive on prices…

No, the arguments are orthogonal. As such, getting into a point-by-point is of questionable merit. Its not that I don't understand what you are saying. To put it another way, economics is based on the premise of risk, not uncertainty. The two are significantly different. The purpose of political economy (ie, the orthogonal approach) is to box uncertainty and turn it into risk for a sub-space of actions. We can then set up markets to work efficienty in that sub-space where risk is a viable operating assumption. In a disaster situation, what was previously part of the subspace risk gets thrown back to uncertainty. In this case, if market-trading is suspended it is not-per-se evidence that "markets are broken". Its just evidence that they are misplaced for the time being. This may or may not make sense, at first glance. But it makes alot of sense when you think about it. There are lots of times when markets are not the best way to allocate goods (even in a market economy -- that is why we have firms). Unless you are comfortable with that idea, the rest of what I'm saying probably won't make sense in general.

Re: Uber Reverts Back to Surge Pricing in New York After One Day

#69

Post by tptacek » Thu, Nov 01, 2012, 11:37 PM UTC

001sky wrote: post #68

tptacek wrote: post #59

Earlier quoted context omitted.

I don't think you read my original comment. I think you skimmed it, concluded that I was arguing for abolition of all price caps to allow "free market capitalism" to solve all our problems, and wrote a philosophical response. In fact, I don't believe we should abolish all price caps. I simply think the cap we've chosen is foolishly low. We have empirical evidence that a dense western urban area can survive on prices…

No, the arguments are orthogonal. As such, getting into a point-by-point is of questionable merit. Its not that I don't understand what you are saying. To put it another way, economics is based on the premise of risk, not uncertainty. The two are significantly different. The purpose of political economy (ie, the orthogonal approach) is to box uncertainty and turn it into risk for a sub-space of actions. We can then s…

I'm sorry, but to be honest, no, this doesn't make much more sense to me after rereading.

I'm sure there are elements of macroeconomics that don't apply in disasters, but all I'm talking about is the law of supply and demand, and how a 10% cap on gasoline price increases causes problems with it. I feel like basic supply and demand remains meaningful the day after a hurricane.

Re: Uber Reverts Back to Surge Pricing in New York After One Day

#70

Post by pavel_lishin » Fri, Nov 02, 2012, 12:39 AM UTC

liber8 wrote: post #58

pavel_lishin wrote: post #32

Earlier quoted context omitted.

As I recall, authorities turned away anyone trying to make a quick buck by selling essential supplies. Even with fixed prices, there was a limited number of goods. Driving a truck there to unload your wares still made economic sense, if you could do it at a large enough scale.

God forbid people be allowed to voluntarily exchange their money for essential supplies! Snark aside, whether it made economic sense or not was up to those people to decide. Clearly, it didn't make economic sense for people to drive 1000 miles to sell generators at cost, because people stopped doing it once they weren't allowed to profit. Posters upstream discuss rationing, which never works well either. It still end…

> Clearly, it didn't make economic sense for people to drive 1000 miles to sell generators at cost, because people stopped doing it once they weren't allowed to profit.

I literally thought they weren't letting anyone into the Katrina-damaged areas, whether they were trying to gouge people, or just sell necessary supplies, or even give them away for free.

I understand their rationalization - how do you tell a do-gooder from a looter? And even if you can prove they're a do-gooder, how do you know they won't fall victim to crime, and become another casualty for you to worry about? But I do disagree with it.