Logo


Abhijnan Rej & Prashant Kumar: Banning surge pricing is bad economics

The Delhi government's decision to stop surge pricing by app-based taxi companies Uber and Ola ignores the basic principles of economics to appease a vocal section of the vote bank

Abhijnan Rej & Prashant Kumar

When government intervention is based on a failure to understand the basic tenets of economics and/or to pander to vote banks, it is necessary to call it out. The Delhi government is at it again and by doing so, it is inadvertently signalling to the world that it is clearly not open for business. This week's announcement - or rather threat - to app-based taxi companies Uber and Ola to cancel surge pricing or have their cars impounded is yet another example of how Chief Minister Arvind Kejriwal is willing to overlook the basic principles of economics to appease a vocal section of his vote ...