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6 reasons Ubernomics could be fatal to itself, its customers, and mass transit | GeekWire

Each time Uber angers customers with another surge pricing incident, or angers a city by ignoring its laws, an army of fans jump to its defense (as if Uber needs the help) and cry “free market.” Then, self-congratulatory insults at stupid consumers or old fart city leaders are hurled, along with an easy, breezy explanation of supply and demand. The New York Times went so far recently as to run a headline saying, “Uber improves life, economists agree.”

Uber is making a lot of people into amateur economists. Including, it seems, many professional economists.

I too am an amateur economist, so I went to a real one for insights on Uber’s pricing strategy. His name is Dr. Joe Sulmona, a transportation strategist and economist based in Vancouver, B.C. He’s helped plan massive transportation systems around the globe. He likes Uber, too. But he’s very worried it has begun a race to the bottom that no one can win, and no one is talking about.

I asked Uber if it wanted to talk about the race, but did not get a response. I’ll happily update this story if the firm, or a competitor, would like to respond now.

The trouble begins, ironically, not because Uber prices are too high for New Year’s Eve drinkers (though that’s a problem, too), but because Uber’s prices are too low.

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6 reasons Ubernomics could be fatal to itself, its customers, and mass transit.

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