Is regulation even needed? YES!!!
In the example of Uber, peak periods allow for surge pricing - this occurs when taxi demand is high, usually during peak periods. According to Uber, surge prices occur to ensure that there are available rides for customers who are willing to pay more. This also incentives drivers to get on the road since the demand (and revenue) is higher (Shontell, 2014).
Uber currently does not have a cap on the maximum surge it charges. On New Years day in New York in 2013, Uber customers paid as much as $350 for a short ride during surge (Shontell, 2014). Is this then, an exploitation of opportunities by Uber?
The New York state office declared that price gouging in New York is illegal when events result in an "abnormal disruption of the market"- examples include weather events, power shortages, strikes and wars. During such events, Uber's surge cannot exceed 2.8 times the normal fare in New York (Kim, 2015).
In such cases where severity of situation is high, the government should regulate these companies to prevent them from unfairly profiting from the situation and its consumers. During common peak periods (such as lunchtimes, or after work rush hour), should there be a cap on maximum surge? I would think not.
In a city with a reliable and efficient public transport system in Singapore, people have the alternative to switch to taking public trains or buses. They can even take traditional taxi companies like Citi-Cab or Comfort if they do not want to pay exorbitant Uber prices.
People who still choose to take Uber when given other (better) alternatives, thus know that they are paying more for the convenience. In addition, Uber ensures that consumers know that they are being charged such surge prices - the estimated cost will be made known to the customer before confirming the Uber ride. As these people would rather pay more to get the taxi quickly, I would agree that there should be no maximum cap that Uber can charge.
However, the same cannot be said for countries where there is a lack of alternatives, or when public transportation is unreliable.
In the aspect of safety, there definitely should be some form of government intervention. To become an Uber driver in Singapore, the requirement is rather easily fulfilled - one simply has to possess a manual or automatic driving licence (issued at least a year). In comparison to traditional taxi companies where employees go through stringent checks and tests to ensure that they are well qualified, the process of becoming an Uber driver is much easier and lax.
In addition, Uber has been plagued with several assault issues - in India, it has gotten so extreme such that it features an 'SOS' button to ensure the safety of its users. In worst cases, in an accident, is Uber responsible for its drivers?
Back in 2013, Uber driver Syed Muzzaffar was logged into Uber when he struck and killed six year old Sofia Liu. Another case reported an Uber driver slamming into a fire hydrant which then broke and injured a pedestrian. Uber has then consistently denied any legal responsibility for their driver's actions.
According to San Francisco Chronicle, government regulation has made it compulsory for ride-sharing companies to provide $1 million in coverage for injuries caused by a driver who accepts a ride. When a driver is logged into the app but has not picked up a customer, the law requires $300,000 in coverage.
In the aspect of safety, there definitely should be some form of government intervention. To become an Uber driver in Singapore, the requirement is rather easily fulfilled - one simply has to possess a manual or automatic driving licence (issued at least a year). In comparison to traditional taxi companies where employees go through stringent checks and tests to ensure that they are well qualified, the process of becoming an Uber driver is much easier and lax.
In addition, Uber has been plagued with several assault issues - in India, it has gotten so extreme such that it features an 'SOS' button to ensure the safety of its users. In worst cases, in an accident, is Uber responsible for its drivers?
Back in 2013, Uber driver Syed Muzzaffar was logged into Uber when he struck and killed six year old Sofia Liu. Another case reported an Uber driver slamming into a fire hydrant which then broke and injured a pedestrian. Uber has then consistently denied any legal responsibility for their driver's actions.
According to San Francisco Chronicle, government regulation has made it compulsory for ride-sharing companies to provide $1 million in coverage for injuries caused by a driver who accepts a ride. When a driver is logged into the app but has not picked up a customer, the law requires $300,000 in coverage.
Some form of government regulation is needed to ensure the people of society are treated fairly and all people are taken care off. This also draws a clear line towards the responsibility of a firm such that there is less uncertainty when problems arise.
references:
http://www.businessinsider.sg/ubers-highest-surge-price-ever-may-be-50x-2014-11/
http://abcnews.go.com/Business/uber-chooses-surge-price-cap-emergencies/story?id=28494303
http://www.sfchronicle.com/bayarea/article/Uber-may-be-liable-for-accidents-even-if-drivers-7377364.php
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