Podcast

Episode 516: Why Paying $192 For A 5-Mile Car Ride May Be Rational

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22 min 31 sec
 
Image #: 26305792 Transportation app Uber is seen on the iPhone of limousine driver Shuki Zanna, 49, in Beverly Hills, California, December 19, 2013. Photo taken December 19, 2013. REUTERS/Lucy Nicholson (UNITED STATES - Tags: BUSINESS TRANSPORT) REUTERS /LUCY NICHOLSON /LANDOV i i
LUCY NICHOLSON/Reuters /Landov
Image #: 26305792 Transportation app Uber is seen on the iPhone of limousine driver Shuki Zanna, 49, in Beverly Hills, California, December 19, 2013. Photo taken December 19, 2013. REUTERS/Lucy Nicholson (UNITED STATES - Tags: BUSINESS TRANSPORT) REUTERS /LUCY NICHOLSON /LANDOV
LUCY NICHOLSON/Reuters /Landov

Here's the scenario: A man and his wife are desperate to get to the hospital because she is about to deliver a baby. It's a hot summer day. It's rush hour. They flag down a private car and ask, "How much?" To their surprise the driver wants to charge them four times the normal price of a cab.

So, is this a story about a cabbie taking advantage of a vulnerable couple or is it simply good economics?

Today, we are talking about a company that charges people in desperate situations more for a ride, and we'll consider the argument that it might actually be better for everyone.

Music: Divine Fits's "Flaggin a Ride." Find us: Twitter/ Facebook/ Spotify/ Tumblr. Download the Planet Money iPhone App.

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