Surgical Supplies
New York City officials continue to struggle ineptly with the decisions about if, and how, they should regulate Uber, according to the Wall Street Journal:
City Hall is working to avoid a fight with the ride-hailing company, which spent millions of dollars this year to beat back a proposal by Mayor Bill de Blasio it argued would hinder their growth. Whether city officials will try to regulate surge pricing still isn’t clear. A spokesman for Mr. de Blasio said the administration’s priorities are “expanding accessibility for the disabled, securing support for public transit, protecting drivers and passengers, and managing congestion.” Uber’s government-affairs team, in conversations with New York City Council members and others, has focused its attention on any restrictions on the company’s surge pricing. “That seemed to be the one thing they were really concerned about,” said a council member who spoke to Uber executives.
Given Uber’s extraordinarily transparent sense of self-interest, the easy, natural inclination is to intensely scrutinize whatever it is openly “really concerned about.” But, despite nearly universal loathing of surge pricing by almost everyone, from Uber’s most fervent superusers to occasional riders, it is precisely what least needs additional regulation, which is to say that it does not need to be further regulated at all. (An agreement with the attorney general already caps surge pricing whenever there is an “abnormal disruption of the market,” like a natural disaster or state of emergency.)
As explained previously, surge pricing is literally what makes Uber work in its current form. It only goes into effect when there aren’t enough drivers to meet demand; it both incentivizes more drivers to hit the road, increasing supply, and discourages riders to take a trip, decreasing demand, until supply and demand are restored to equilibrium. This is the only law that Uber truly cares about, and right now, without its ruthless implementation through surge pricing, a car would probably not magically appear in front of the bar to retrieve your lifeless body at 1AM on Saturday night less than five minutes after you opened the app.
More broadly, everything that Uber is working on right now as it moves toward becoming something that might be more accurately described as privatized mass transit will effectively eliminate surge pricing anyway as the company is better able to meet demand without pushing it down or increasing the supply of drivers. (Think about it this way: Uber neither wants to turn riders away nor pay more drivers more money; it wants the maximum number of passengers carried by the minimum number of drivers for the lowest possible price. Uber hates surge pricing almost as much as you do.) UberPool and its more recent, bus-like spinoff, UberHOP, recently announced in Seattle, allow one driver to ferry multiple passengers simultaneously (up to five in UberHOP) with minimal time gaps between each ride. How innovative! How efficient! How cheap.
The components of the Uber apparatus that need thoughtful regulation — let’s leave aside labor here!!!! — are exactly the ones that are most complex and defy easy rule-making. Like, in the interest of reducing the number of cars on the road, maybe there should be a set number of Uber-affiliated vehicles (in which case, surge pricing would be extremely necessary to ensure that the service continues to function!). Or maybe there shouldn’t be a cap at all, or not in certain areas anyway, because some subway lines are already at or very near capacity. Maybe the city could study it.
Regardless, if the city were to be seduced into the idea that surge pricing is an issue to latch onto because the people who complain about it tend to be vocal and tech-savvy and relatively well-off — like the people who banded together to scuttle the city’s previous attempt to come down on Uber — it should recognize that the ones who protest the loudest are the people who use Uber the most. And who could be a worse judge of externalities? They already have their transit solution.