Uber's surge pricing a study in important investment topic: Consumer surplus
from CFA Institute's Enterprising Investor
Uber, the San Francisco–based start-up whose mobile app allows people to hail taxis on their smartphones, has had its fair share of bad press lately. (See: “Is Uber’s Surge-Pricing an Example of High-Tech Gouging?” and “Taxi Drivers Turn Violent against Uber in Paris.”) At the heart of the issue is something known as “surge pricing.” Without commenting on the merits of Uber’s specific business plan or about the ethics of its economics, its story provides a case study in an important investment topic: the consumer surplus.
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