Consider the ethics of surge pricing. Surge pricing involves the price of an Uber ride changing...

60.1K

Verified Solution

Question

General Management

Consider the ethics of surge pricing. Surge pricing involves theprice of an Uber ride changing based on demand conditions in agiven place at a given time.
a) Sketch a supply & demand model (riders are the buyers anddrivers are the sellers) to highlight what might happen with andwithout surge pricing. Pay special attention to possibleimplications for efficiency and equity, do you, on balance, thinkthat surge pricing is right?
b) Uber changed its rules to allow drivers in New York to settheir own ‘surge prices,' (possibly prompted by a lawsuit accusingUber of price-fixing by not allowing drivers to compete with oneanother on price). Does this change your thinking about whether ornot surge pricing is right? Why or why not?

Answer & Explanation Solved by verified expert

3.7 Ratings (297 Votes)

Question a During the surge pricing times which is usually the morning and evening hours when people commute to their workplace or from the workplace to their home the demand becomes inelastic and people are not having any other option but to pay for the price which Uber is asking Therefore with 12x or 20x See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member