#516: Why Paying $192 For A 5-Mile Car Ride May Be Rational

Planet Money

• Episode: #516: Why Paying $192 For A 5-Mile Car Ride May Be Rational
• Website: Planet Money
• Feed URL: http://www.npr.org/rss/podcast.php?id=510289
• Duration: 00:23:28
• Published: 2014-02-08 04:23

Here's the scenario: A man and his wife are desperate to get to the hospital because she is about to deliver a baby. It's a hot summer day. It's rush hour. They flag down a private car and ask, "How much?" To their surprise the driver wants to charge them four times the normal price of a cab. So, is this a story about a cabbie taking advantage of a vulnerable couple or is it simply good economics? Today, we are talking about a company that charges people in desperate situations more for a ride, and we'll consider the argument that it might actually be better for everyone.