Read the article first to answer the questions.
Which reason from the Guideposts to Economic Thinking below best helps to explain this mystery (tips the balance). * PEOPLE choose. Choices have COSTS. People respond to INCENTIVES. RULES OF THE SYSTEM influence choices. People gain from TRADE. Choices have CONSEQUENCES or RESULTS in the future. Markets lead toward EFFICIENCY. OOOOOOOO Economic decisions are made at the MARGINS. Pick 3 of the clues above and match each to a guidepost (you may repeat guideposts if appropriate). * Indicate which pair is the MOST IMPORTANT for tipping behavior to explain the mystery. Explain how each other clue-guidepost combination influences behavior to solve the mystery. Your answer Pick at least one of the clues above that does NOT match to a guidepost and analyze its information. * Remember, all clues are TRUE but not all are relevant to an economic understanding of the mystery. Does this provide context on the problem, or distract you from the economics, or explain something about the situation? Why, when strange places seem ever more dangerous, are people increasing use of alternatives such as Uber? * Look at the clues (#1 -7) in the list opened by the arrow in the box) and pick the one that best explains the mystery. Choose Uber competes with established taxis and other private transportation firms. From Q1 2014 to Q1 2015, Uber's share versus taxis and car rentals rose from 9% in 2014 to 29% in 2015. l The cost of a ride from the airport to downtown with UberX, the lowest cost Uber option, is usually less than half the taxi fare plus a 20% tip. Tipping is not customary with Uber. At peak times, Uber goes into "surge pricing" mode and its prices increase more than 1.5 times. Business travelers look for both value and convenience. Uber payments are processed online. Uber's Astounding Rise: Overtaking Taxis In Key Markets Andrew Bender Contributor Travel I delve into the business of travel, and often the fun too. f You've probably suspected it, and a new report confirms it: With breathtaking speed, the ridesharing company Uber is taking market share from taxis and other traditional transportation. in "Ridesharing services are quickly transforming the market for taxicabs and limousines," reports Certify, an expense management company specializing in small businesses. Based on expense reports from business travelers in the first quarter of 2015, Certify says that "an average 46 percent of all total paid car rides were through Uber" in major markets across the U.S. That's a steep rise from a mere 15 percent in the first quarter of 2014. Meanwhile, the percentage of rides in taxis, limos and shuttles fell from 85 percent to 53 percent over the same period. TAXI U UBER If Uber use keeps rising, it will eclipse taxis in many markets; it's already Dallas... [+]"It's fascinating to see how [market] disruption unfolds from city to city," says Robert Neveu, CEO of Certify. "For example, business people in Dallas and San Francisco are now expensing Uber more often than taxis." "The business community is looking for value and convenience," Neveu says. Recommended For You Father's Day Gift Guide: The Best Overnight Bags For Dad Max Crowley, manager of the rideshare company's Uber for Business division concurs. "Across business travel we have seen the strongest growth on uberX, our lowest cost option." How big is the price differential from taxis? Pretty darn big. Consider that staple of business trips, the ride from downtown to the airport. From Downtown L.A. to Los Angeles International Airport, for example, the fare is about $22 via UberX versus $46.50 for taxi fare; a 20 percent tip bumps the cost of that taxi ride to about $56 (tipping is not customary using Uber). PROMOTED UNICEF Civic Grads of USA BRANDVOICE | Paid Nation BRANDVOICE | Life BRANDVOICE | Paid Program Paid Program Program Education, Not Going All In On Young Show Me The Equal Marriage: Building Better Futures For Girls Voter Education Money In Ethiopia There are comparable cost differences (Uber vs. taxi plus tip) in Chicago ($26 vs. $54 to O'Hare), Dallas ($27 vs. $49 to Dallas-Ft. Worth) and Washington, D.C. ($46 vs. $76 to Dulles Airport). Uber also has more expensive options and is trying out less expensive car pool-style options in some markets. That said, savings can evaporate at peak times if Uber goes into "surge pricing" mode and fares increase between 1.5 times and "how the %* #@ much?"As for the convenience, Neveu says that business travelers are eager to adopt innovations such as Uber's smart phone car request system, and being able to hop out immediately on arrival since payment is processed online - passengers receive notication of the fare via email and the Uber app. "We did not participate in Certify's research," says a statement on Uber's blog, "but our own data conrms that more companies and employees are turning to Uber for their travel needs." Uber's competition Lyft is also making inroads into the ridesharing market, but Certify reports that it has only about a one percent market share among business travelers. Going forward, personally I'm curious to see whether Uber will also turn out to be a disruptor for the rental car business. Certify calls rental cars' share of the ground transportation market "relatively constant," but based on my own recent experience and, admittedly less scientic, conversations with business travelers, I wonder if we're in for yet another game change. UBER VS. TAXI VS. CAR RENTAL While Uber ride increases directly correlate with taxi ride decreases, car rentals are relatively consistent. 15: Quarter. 2014 ist Quarter. 2015 9 % I Rental Car l Uber Taxi I Rental Car I Uber Taxi Uber's encroachment into the taxi market has been breathtaking. Could rentaL cars be next? {Graphic:... [+]
