A great analogy by Ben Thompson around Uber’s pricing model, the efficient allocation of resources (e.g. rides), and corresponding cost associated with procuring those resources (e.g. surge pricing). His discussion of economic theory and real world application of those theories is strong. He also touches on Paul Graham’s essay, mentioned earlier.

From Ben’s essay:

In the context of the price mechanism, money serves the role of a medium of exchange. The problem, though, is that money serves other functions as well: specifically, money is a unit of account and a store of value. It is the latter that is the rub when it comes to Uber and the idea of allocating rides based on price. To return to the extreme example above, what if the woman in labor is poor, and the person who only needs to travel a few blocks is rich? It very well may be that the latterÂ’s ability-to-pay will trump the formerÂ’s willingness-to-pay; this is, to my mind anyways, the most valid reason to oppose surge pricing.