Posts Tagged ‘taxicab’

Taxicab Confessions — DC (microeconomics)

December 11, 2008

As I buckled up the car slowly began its journey.  The driver told me to ignore the extra dollar visible on the meter.  The fee to cover higher fuel costs ended last Thursday and he hasn’t figured out how to unset that feature. (Meters are a novel thing in DC proper, by the way.  2 months old?)

Conversation started about the benefit of lower gas prices to taxi drivers.  Then the driver announced suggestively, “What I want to know is how the price went up so fast and then down again.” I blogged last May on the poor reporting, each explanation pointing to different cavern ignorance. “I’m not happy with the reporting. There’s no clear explanation of these price changes. One reason for the drop, though, is the slowdown of the US economy. Less demand.”

“So how do they actually set prices,” he inquired.