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- Title
THE UBER LOOPHOLE THAT PROTECTS SURGE PRICING.
- Authors
Griffith, Keyawna
- Abstract
Uber, a company that provides transportation services, significantly raises prices for rides in certain areas when demand is high. This system, known as surge pricing, causes some customers in a particular city to be charged double, triple, or quadruple what they would normally pay for a ride while other customers in the same city are charged significantly less for the same service. The fact that surge pricing can be and allegedly has been manipulated by Uber drivers, who are considered independent contractors, causes the system to have anticompetitive effects. Surge pricing also causes riders in surge areas to experience an economic loss because they do not have access to the normal fares. The Robinson-Patman Price Discrimination Act of 1936, 15 U.S.C. § 13, describes this type of system as illegal price discrimination. However, the Act does not apply to Uber because it only addresses commodities. Because Uber's transportation is a service, it does not fall under the Act's definition of "commodities." Therefore, Uber is free to continue using surge pricing to discriminate between purchasers. This type of discrimination contradicts the purpose of antitrust laws, which are intended to protect individual consumers from being overcharged by firms, monopolies, and cartels. Because Uber is a firm in the sharing economy, a forum that facilitates using, giving or sharing goods and services with peers through community-based online services, its surge prices should be prohibited by the Robinson-Patman Act. Congress can make this prohibition by amending the definition of "commodities" to include services. This amendment would further the goals of antitrust laws by preventing sharing economy firms like Uber from exploiting riders through surge prices.
- Subjects
UBER Technologies Inc.; PRICE discrimination; TRANSPORTATION; TAXICAB drivers; ANTITRUST law
- Publication
Virginia Journal of Social Policy & the Law, 2019, Vol 26, Issue 1, p35
- ISSN
1068-7955
- Publication type
Article