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?
