This is the Cato Daily Podcast for Wednesday, January 15, 2014. I'm Caleb Brown.

The rapid movement of supply and demand have delivered a bit of sticker shock to consumers

of services like Uber.

Still, that's nothing compared to the reaction to the car service in France.

Peter Van Doren, editor of Regulation Magazine, explains.

The New York Times had a piece detailing some consumer outrage over Uber's surge pricing.

That is, the car service Uber charges way more

during peak demand times, as the New York Times

points out here.

Like during a New York snowstorm or Washington on New Year's Eve,

it sets a higher rate in hopes of increasing supply by enticing more of its drivers to come out or

stay out. And a lot of people have been well complaining about that and help us

understand at a very basic level how does that work?

Well notice that interesting the language you used, and I'm not picking on you, the language

you used to describe how people think of it, is in part part of the problem.

Notice you called it a car service, Uber. Technically, Uber does not own cars.

Uber, in its business model, is a matching algorithm driven by a computer, i.e. there are suppliers of car services who are

individual contractors and they are rated, i.e and they have to provide a certain level of service, a certain kind of car,

and it's very much like what we used to call a black car service, i.e. you could always, when I go to the airport here

in Washington, I call up Al, he's my airport, go to the airport guy.

Al has run his own airport limousine service since the early 70s.

All that Uber is doing is allowing people like Al to match up with people who want rides in real time rather than through a prearranged phone call which is how that market is usually

...