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Comment by cma | Hacker News Reader

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.

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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.

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