Yesterday the New York attorney general reached a deal with the company Uber to cap its “surge” pricing during emergencies. The company, which uses an app to summon cars via a user’s smartphone, uses an algorithm that increases prices during periods of high demand, including emergencies and bad weather, to encourage more of its drivers to work. The agreement was reached in accordance with the City of New York’s law against price gouging, passed in 1979.
Was the agreement a good idea? In the cover story of the Spring 2011 issue of Regulation, Texas Tech researcher Michael Giberson examines the role of high prices and the resistance to them during emergencies.
Read more at http://www.cato.org/blog/new-york-caps-uber-surge-pricing
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