Freakonomics Radio 258. Why Uber Is an Economist’s Dream
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Sep 8, 2016 This podcast explores the economic perspective on Uber, discussing transportation preferences in New York, the value of demand curves in economics, surge pricing during disasters, and the consumer surplus created by Uber. It also teases an upcoming interview with libertarian presidential candidate Gary Johnson.
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Uber Mirrors Ideal Market
- Uber's price adjustments respond dynamically to supply and demand, embodying economists' ideal market behavior.
- Prices rise when demand exceeds supply and fall when supply surpasses demand, achieving efficient market equilibrium.
Demand Curve as Theory Only
- Economists typically represent demand curves as theoretical constructs without direct empirical examples.
- Steve Levitt sought a real, observable demand curve to demonstrate to students but found none before Uber.
Uber Data Unlocks Demand Curve
- Surge pricing data and consumer behavior recorded by Uber offers economists a unique chance to estimate real demand curves.
- Including both purchases and refusals due to price enables observation of price elasticity directly tied to consumer decisions.