Lessons Learned From The $50 Uber Ride
I get really frustrated with myself when in the heat of the moment I slip away from principles that I consider foundational, and have to remind myself that sometimes you have to step away from the emotion of the moment to consider if your thinking is still on the course you want to be on. Such a moment happened to me on my recent trip.
We stepped in to the world of Uber while we were on vacation and found it be a wonderful way to get from place to place. For example, we were able to get from our parking location to the Port of Long Beach to board our ship with no hassle whatsoever. Cost about 12 bucks plus a tip.
When we got out to Hawaii, we used Uber several times to get us from the pier to locations we wanted to visit. And it all worked to our satisfaction. In a couple of the ports we stopped, we decided to rent a car as opposed to taking an organized tour, and used Uber to get us from the ship to the car rental location. All along we were paying somewhere between $10-$20 to get from place to place.
Kona was one of the locations where we decided to rent a vehicle, and we got an Uber to take us to the airport where our car rental was waiting. I think we paid like $15 for that trip.
So, we ambled around the area and kind of took our time, and were pushing our luck in getting back to the ship on time. We got to the airport, dropped of the car and I hit the Uber app to get our ride back to the ship.
Well, to say the least, I was stunned when the option came back with a $50.00 price. What?!!? Where's the $15 fee we paid to get here? I was initially more than a tad irritated. But then I had to stop and let the emotions slip away.
I was forgetting the principle of supply and demand.
Supply and demand form the cornerstone of economic theory, representing the interplay between producers and consumers in a market economy. At its core, the relationship between supply and demand dictates the prices and quantities of goods and services exchanged in the marketplace.
When we made the trip to pick up our rental, there were many options presented to us from which we selected the $15 option. To get back, there were only 2 options (and the other one was even more expensive).
The equilibrium price and quantity in a market are determined at the intersection of the supply and demand curves. At this point, the quantity supplied equals the quantity demanded, establishing a balance between producers and consumers. If the price is below the equilibrium, demand exceeds supply, creating a shortage and pushing prices up. Conversely, if the price is above the equilibrium, supply exceeds demand, resulting in a surplus and prompting prices to decrease. In this case the demand exceeded the supply.
I had to remember, it was decisions I had made that put us where we needed the ride in a timely manner at a time when several Uber drivers had called it a day. I put myself in this position.
The market was simply reacting to the situation I had created. And, putting the emotion of it behind me, I realized that the free marketplace was serving my needs in exactly the way I want it to. In reflection, $50 seems to be a pretty small price to pay to remember that our economic system is truly a beacon to the rest of the world.
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Gallery Credit: Billy Dukes