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Surge Fare Fairness
May 1, 2016
Arvind Kejriwal plays the classic government con. Break your leg, then sell you a crutch. He first creates the problem — choking supply with the odd-even number rule that keeps half the cars in Delhi off the roads. Then he postures as a saviour — banning surge pricing of Uber and Ola (which actually helps make more vehicles available). By impounding over a hundred cabs, he is exacerbating the problem further and gloating in advertisements as if it were a victory.
The Chief Minister of Delhi tweets that he will not allow cab aggregators to blackmail the public. He doesn’t know the meaning of blackmail. Dear sir, let me explain; if I had taped you saying, "I don’t care if the state is ruined by my policies; I just want to rule and will do anything — stupid, populist or downright evil, to stay in power," and threatened to expose you unless you gave me something; then, that is blackmail. Here the cabwala’s have nothing incriminating on the people (except that they elected you) to blackmail them with.
How does one solve a problem of more passengers than taxis? Only two ways — increase the number of vehicles, or reduce the number of passengers seeking a ride. Does forcefully controlling fares do either of them? No. It only helps shift the blame from the government’s idiotic rule to the taxi aggregator. On the other hand, surge pricing solves this problem both ways — it reduces demand a bit as those who have time will postpone their trip; it increases the number of cabs available as the higher fare will attract a driver who thought of doing personal chores or taking time off to ply his trade instead.
Demand and supply, always find their own balance that is advantageous to both the consumer and the supplier; when not skewed by government interference and sundry ‘common men’ wanting to play God.