i am doing a paper on uber and taxis using economics ideas. I need someone to revise it and add more things or take out unnesary things on the paper that i have already wrote. It’s about 7 pages. Below is an idea of the draft so far.
In todayâ€™s society, where money becomes the main source of supply and demand. People travel for the greater trade off with higher benefits and incentives as long as it aligns with self-interest. The power of trade has allowed our society to run on a balance scale from everything between food and beverages to taxi rides and Uber. The wealth that accumulates because of this theory in the economic pattern is moderated either a free market or government regulation. Money being regulated controls how many jobs can come through, how much population and technology is passed, if any inflation will occur.
What has been told with facts and key points, it all entitles to why incentives matter. What are the rewards and penalties that motivate behavior in order for Uber to continue to prosper through government regulations and why are they able to achieve this idea in a positive aspect predicting the accepting principles of the Big Ideas.
When Uber decided to become an actual business, there were little incentives that the taxis or city regulations would support it. In fact, the incentive is to destroy Uber and stop it from expanding in states and countries. Instead up uplifting the idea of the beneficial gain that Uber has created in the economy, Micheal Cardigan of Cardigan Law Firm PC who represent Albuquerque Cab Co. , who is a former member of the Albuquerque council , speaks poorly on the innovation of Uber. Uber was created to create prices of no limitations because they are not under government laws, where as taxis have to charge their rates approved by each state. They are unable to charge less or more and are also required gross receipts taxes and payroll taxes to the city and state. Uber chargers the price in their own interest which follows within the free market of the economy. Incentives are everywhere, just by the jobs that have been created through this system, the income increase, the reliable sake of the drivers, the safetyness of impaired driving yet itâ€™s still taken for granted and yes opposed in a negative mindset for many. What makes microeconomics so excited to interpret a company like Uber is that the do not think and see in their self-interest. They are able to respond to the incentives of all kinds and predict outcomes according to facts.
The second big idea that is taught is when good institutions align with self-interest with the social interest, what conclusions can be tied in. Social interest to use taxis is generally because the state requires licensed taxis to prove they are inspected safety, drugged free, they have a criminal background check, and also provide insurance. Uber does not do providence for the social interest but in the self-interest, you are able to choose your price you want to travel, you can regulate ratings of the drivers, they also are able to GPS your locations. The incentives for Uber is a positive thing because, Uber contributes over 2.8 million dollars per year and creates over 200,000 jobs a month. Uber is available to 137,451,768 Americans with an average pickup time of less than 10 minutes, thatâ€™s 43% of the U.S. population covered in the fours years. It has also reduced impaired driving. Their platform generates 2.8 billion per year for the U.S. economy and is still increasing. Self-interest and social interest do not always align, one can be too weak and the other can be too strong. Therefor we rely on the invisible hand. An outcome that can come from this if the government changes the incentives using taxes, subsidies or regulations.
Trade-offs are everywhere. Thereâ€™s a reason why Governor John Hickenlooper signed into law the first ridesharing legislation in the state of Colorado. The deal between the trade off between Uber and taxis are because the competitive nature of pricing and time. People like what is more convenient and easy hospitality. Cities that are bigger such as Las Vegas, NV use taxis because of the convenience, which they are everywhere, plus the time and price is fair by destination. Majority of city such as our own, calling a taxi can take an hour and the pricing is more expensive than a simple than Uber. The trade off for taxis is that you are guaranteed security and stable government laws whereas Uber is fighting for their government rights but because it is cheaper and saves time, those are the central benefits why the industry is still in for the win. To understand the trade off involves the benefits and lost which is the opportunity cost.
Thinking on the margin, for the owners, Garrett and Travis who are the co founders of Ubers came in the concept making sure they werenâ€™t over the margin of making their choices on how to calculate pricing and safety with their competitors. Their marginal cost(additional cost for expanding their business in more cities and countries), their marginal revenue( producing a little bit more), and the marginal tax rates ( tax rates on an additional dollar of income). Margins are to restate their trade off which enties in economics the decisions that took place with Uber. Because of this they have produces 17 billion dollars now in funding.
The fifth idea, is power of trade. The real reasoning and power of trade is to increase production through specialization. Speaking about Uber alone, none of us has to produce the car, pay for the app, and hire the drivers. It is beyond exchange, we prosper through Uberâ€™s specialization because each person in those three fields above had someone specialize their knowledge to increase the productivity of this product. Trade allows us to take advantage of the economies of scale which reduced the cost created when goods are massed produced. Not one driver could afford all of the cars and gas to help everyone arrive at their destination but when a driver multiplies for thousands of people nationwide, it reduces the cost for the increase in product to run Uber at a lower rate.