Comment Re:Supply / Demand curve (Score 0) 190
Ha ha, the law exists and you fail to understand it. To make your example appropriate for the situation you have to set a condition that the bakery only has a limited supply of ingredients and/or energy and/or time to bake the cookies, so does Uber, they have a limited supply of drivers at any moment in time.
So a bakery cannot just rump up the supply on a moment notice if, for example, ten buses with tourists stopped by the bakery and all of them wanted some biscuits. However the baker can raise the prices if he sees an increased demand, thus making sure to reduce the secondary market for his product, which would be created (an opportunity for arbitrage) if a few tourists discovered the bakery first and decided to buy all the product in it, because they could then insert themselves between the baker and the rest of the tourists, making a nice profit for themselves.
The baker could raise the prices, but he would have to react quickly to the changing market demands.
What Uber is doing is they are looking at all of the information at once and deciding that the market conditions are such that raising prices will in fact allow them to make more money by finding the new equilibrium price for their service. If there is much more demand than there is supply, raising prices is a very legitimate (and used) method of ensuring efficiency, which otherwise would be much lower.