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by Jeff_Brown 2589 days ago
Not exactly. The percentage that Lyft takes is the same, so Lyft actually makes more money from these price-hikes. The ones suffering are the passengers.
2 comments

This assumes an inelastic demand curve. DCA has other options, such as taxis.

(edited s/elastic/inelastic - I dun goofed. Thanks, Erik!)

The existence of other options implies a more elastic supply curve, but implies nothing about demand.

That passengers suffer from a price surge does not assume an inelastic demand, or even a downward-sloping one. If you pay a higher price, you're suffering more, even if somehow it leads you to buy more of that thing.

Eh--"suffering" seems a bit dramatic; as economic transactions go, the up-front price quote by Lyft and Uber makes it pretty transparent and the options available to depart DCA put an upper bound on costs. But I was more referring to how Lyft and Uber make more money off of shorter, cheaper rides. They do make more from longer rides, because of percentages, but my understanding is that volume makes them much more money and that higher prices do depress volume.
These are good points.

By "suffering" I just meant "paying (someone, maybe another ride service) for it".

If higher prices depress volume, then some of the very drivers temporarily striking to raise the price end up paying for it, by ending up without a client. If all the drivers gain from it, then the airport demand for their Lyft services in particular (as opposed to demand for other ride companies) would in fact appear to be pretty inelastic. (Both seem plausible to me.)

*inelastic

Great point - they could be loosing a lot of passengers to taxis

The math has some nuance: an extra dollar for the driver increases his margins a lot more than it does for lyft/uber.

10 rides at 10 bucks or 5 rides at 20 is the same for uber, but way better for the driver (and worse for the consumer).