This is a simple lesson in free-market economics, provided courtesy of the harsh winter weather of recent days in the eastern half of the U.S. Coincidentally, the annual meetings of the American Economic Association were scheduled to take place in Philadelphia, from January 3rd through the 6th. My friend and colleague, Haizheng Li, flew in to Philadelphia late in the evening of Thursday, January 2, landing around 10:45. As he later told me, by then it was snowing heavily. Because of backed-up air traffic, the pilot was not able to park at their arrival gate for forty minutes. After de-planing, Haizheng waited for another forty minutes to retrieve his luggage.
The AEA conference is huge, with several thousand attendees. Under ordinary circumstances, the participating conference hotels are constantly running shuttles to and from the airport to pick up guests. Taxis are running nonstop. Not on this night.
While waiting to collect his luggage, Haizheng learned from a colleague that the hotel shuttle service was taking two hours or longer. Worried, he went out to the taxi line even before getting his luggage. Snow was falling, the line of prospective customers waiting for taxis was long and there were no taxis in sight. It was near midnight. The taxi staff said it was unlikely any cabs would be coming in such bad weather.
Haizheng and a number of other passengers were facing the grim prospect of an uncomfortable night at the airport. The food vendors were all closed. Haizheng was tired and hungry - and he was scheduled to make a presentation at 8:00 the next morning.
Unexpectedly, out of the night came a savior. A man walked through baggage claim asking whether any of the recently arrived passengers needed transportation to one of the downtown hotels. Haizheng didn’t ask what the ride might cost, he just said yes. As it turned out, the man took six stranded passengers, plus luggage, to their hotels for $25.00 each.
No doubt in doing so he broke at least one, probably several laws regarding passenger transport that are designed to prop up the local taxi cartel. Yet this man’s action dramatically improved the lives of six individuals, each of whom undoubtedly would have been willing to pay much more than $25.00 to get form the airport to their respective hotels. Haizheng told me he would have paid a lot more.
There are those who argue that this unscrupulous individual took “unfair” advantage of these travelers in distress by charging them at all. Critics would say that he was a heartless “price-gouger.” Really? The fact is, no one was offering to provide private transport for the stranded passengers at no charge. For that matter, the real price-gougers - government regulated taxi companies - were nowhere in evidence.
I have no way of knowing how much it inconvenienced this man to find and transport half a dozen extremely stressed-out and grateful strangers in the wee hours of a bitterly cold, snowy winter night. He surely was inconvenienced. But the fact that his offer was made and followed through on suggests that he was compensated fully for his inconvenience and therefore happy to have been of service to his fellow man.
To that mystery driver: I applaud you. Your entrepreneurial spirit and actions embody everything that is beneficial about voluntary exchange among consenting adults. If you broke any laws, well, such laws benefit narrow special-interest groups and reduce social welfare. Your actions unambiguously enhanced social welfare.
Overzealous regulators and the cynical politicians who enable them are the ones who deserve scorn, not good Samaritans like you. I only hope that if I’m ever stuck at an airport in a winter storm, you or someone like you will come to the rescue.