Surge Pricing

Today I want to briefly discuss something I hadn't heard of before yesterday and want to share with you, as it may be an early sign of an even more dystopian twist in the capitalist paradigm.

I'm talking about "surge pricing", which can be seen as the epitome of the idealization of price formation through market forces. In modern economics "value" isn't that important. Instead, price, and how prices are determined by supply and demand, regulate social relations in the marketplace of everything. Unlike Marxist economic doctrine, there's no real distinction between trade-value and use-value. There's no place for calculating the value of labor against the value of free time; this is all done through market mechanisms. "Markets know best" is the mantra of modern capitalist economics, robbing human agency from determining what's best for individuals and societies alike.

There was a time when we went to a shop to buy something, and the price of that something was relatively stable. And what's more, the price was the same for me as it was for you. With surge pricing we're truly entering an age in which we capitulate completely to the notion that a price is determined only by what someone's willing to pay under any given circumstance. That way, the price of something can vary wildly between individuals and circumstance. We've always had, during our lifetime, the price formation governed by supply and demand; if a commodity is in great demand or very scarce, the price is high, since the market quickly indicates how much can be demanded for it. Industrially manufactured products, however, are anything but scarce under capitalism. They are only scarce in terms of money, in terms of who is willing (and able) to pay, not as a state of nature.

Surge pricing has made possible that people who order an Uber or Lyft drive on New Year's Eve were unpleasantly surprised by astronomical prices for a ride home. The algorithms behind the Uber and Lyft apps are constantly monitoring supply and demand, and adjust prices, and with that the drivers' wages, accordingly. This is explained as a great benefit for customers as well as drivers, as customers who really need a cab, and are willing to pay the higher price, are assured one will be available on short notice, and drivers will have more income on busy nights. This may sound wonderful in theory, but it is, in my opinion, quite the opposite, and I'll explain why.

Before price surging, people who ordered a taxi on New Years Eve and on other busy moments, would have to wait longer for their ride home, as they were placed in a queue and had to wait their turn. Although this was inconvenient, it meant that everyone would get their ride home eventually. This queue system made everyone equal, rich and poor had the same chance of getting home comfortably. Willingness to pay isn't the same as ability to pay. Everyone has time to wait, not everyone has the money to pay the astronomical prices at extremely busy times. And if we extrapolate this idea that the price is whatever someone's willing to pay at any given moment to the online world of personal information gathering algorithms, the assault on our innate sense of fairness becomes even more devastating. Two people searching for a product online can be offered the same product, at the same seller and at the same moment, for completely different prices, as the algorithms have guesstimated their individual willingness and ability to pay.

Markets combined with a profit-motive are unable to provide a just and fair world of equals. In the example of Uber and Lyft, ask yourself what the hell was wrong with the notion of "first come, first serve". Why let go of the queue system as a great equalizer? With surge pricing the queue isn't gone, it's just that some, those who are unable to pay, are permanently in it. The notion that two individuals pay wildly different prices for the same product should be seen for hat it is: unfair and exploitative. And some things that are important to all of us, like housing, education, healthcare, food even, should be removed from market forces completely, as the demand for those things nearly reaches infinity; we would pay anything to not die. The allocation and distribution of most commodities should be left to human agency, through democratic processes with a sense of fairness. Right now we do that with reduced prices for certain demographics, like the young and old for example; we assume that the young have less money because they're just starting their professional lifes, and the old have served the community with a lifetime of productive attribution to society. And we all think that's fair. Surge pricing, however, has nothing to do with fairness or efficiency; it's just another way in which we give ourselves over to the market forces and the plutocratic entities behind them.

Linked below is the video I found yesterday and introduced me to the term "surge pricing". We all already knew of the practice, but now we also know the label that goes with it. Watch the video: it's a fairly neutral discussion on the topic, showing the pros as well as the cons; you know where I stand.

Thanks so much for visiting my blog and reading my posts dear reader, I appreciate that a lot :-) If you like my content, please consider leaving a comment, upvote or resteem. I'll be back here tomorrow and sincerely hope you'll join me. Until then, stay safe, stay healthy!