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Market Prices are Objective Reports

Here’s a letter to the New York Post:


You report that critics of Uber call that company’s rising fares “downright unethical” (“Uber ‘taking advantage’ of unsafe NYC with astronomical fares: outraged riders,” April 15).

Prices reflect underlying realities of demand and supply. In NYC, rising crime (thanks Bill de Blasio!) simultaneously raises the demand for Uber rides as it lowers the supply of such rides. These realities cannot help but push fares upward. The supply of rides is further reduced – and, hence, fares further raised – by rising fuel costs (thanks environmentalists!) and the continued use of the medallion system to artificially limit the number of taxicabs (thanks New York City Taxi and Limousine Commission!).

Blaming high fares on Uber makes no more sense than blaming a city’s high murder rate on a newspaper that accurately reports crime statistics. Further, accessibility of rides would no more be increased by a government prohibition of rising fares than would safety in the city be increased by a government prohibition of reports of rising murder rates.

Ride-share fares will remain high in Gotham for as long as these underlying problems persist.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030