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Should Uber Raise Prices During a Transit Strike?

A Bay Area Rapid Transit (BART) train sits idle at the Millbrae station on July 3 in Millbrae, Calif.
A Bay Area Rapid Transit (BART) train sits idle at the Millbrae station on July 3 in Millbrae, Calif.Photograph by Justin Sullivan/Getty Images

San Francisco’s transit strike has been great news for ride-sharing services such as Lyft, Sidecar, and Uber. It also has the potential to be the latest testing ground for Uber’s controversial pricing strategy.

Unlike regular taxi services, Uber sets its prices based on demand. When there are more people looking for rides, the company says it raises fares to encourage more drivers to get on the road. So-called dynamic pricing is increasingly common, and the rationale behind flexible pricing in markets with elastic supply makes sense, according to Slate’s Matthew Yglesias. But price controls on public services like transportation are seen as ways to keep them accessible to the public at large. When the prices of gasoline and bread shot up after Superstorm Sandy, law enforcement officials declared they had zero tolerance for price gouging and went after businesses that raised prices.