I had an experience the other night which I thought I’d share with you. Janet was gone, and Jordan, Isabella and I were in the mood for a pizza. I checked our favorite pizza place, Giovanni’s, and, as it turns out, they had closed their pizza restaurant in Winter Park. So, I took a look at UberEats and it listed a dozen or more pizza restaurants with published delivery times of 30 to 45 minutes.
Nonetheless, the preference was to order from Papa John’s which does not get serviced by UberEats for whatever reason. I ordered the pizza and was told that it would be there within 45 minutes. Fair enough.
An hour later, I called and asked them where the pizza was. They indicated that the pizza was still at the restaurant and that they were short of drivers. I told them to repeat what they had said and they told me they were short of drivers. I asked them when the pizza would be picked up from one of their drivers and they said they didn’t know because all of the drivers were actually out, but that it would get out as quickly as possible.
I knew that I should not have taken that as an answer, but I did nonetheless. So, time passed. Thirty minutes later I called again and told them that, if the pizza was still hanging out waiting for a driver, I would come and pick it up myself. They told me that wouldn’t be necessary and that it would get out in the next five minutes. The long and short of it is that it finally arrived a little under two and a half hours after I had ordered it.
Don’t get me wrong – we like Papa John’s, but it did get me thinking. Papa John’s relies on its own drivers. And with their own drivers, like a planned economy, what they to do is balance supply against anticipated demand on any given day. If they guess right, they are okay. But if they guess wrong, customers wait two and a half hours for their pizza. Hence, it is a balancing act as to how many drivers to have at any particular time.
Restaurants, on the other hand, which rely on UberEats, represent the demand economy. The supply is out there and matching the supply to the demand is easy enough. As more orders get called in, more Uber drivers show up since it is in everyone’s best interest at that point to get the pizzas out the door and, from the Uber driver’s standpoint, to get the assignment to deliver them.
Economics is really not all that much different than that simple experience with the pizza. A planned economy tries to plan ahead, often incorrectly. A demand economy simply responds – and the driver (no pun intended) is motivated by self-interest.
Image source: thestreet.com