New York City Mayor Bill de Blasio sounded off on a Domino’s restaurant charging $30 for a pizza to New Year’s Eve revelers in Time Square.
Mayor de Blasio called it price-gouging by big business. In reality, it’s supply and demand.
As with hotels, souvenir carts, cabs, and Uber, when demand for goods and services rises, so do their prices. We as consumers decide whether we want to pay them or not. This is a basic economics lesson for the mayor. Instead, of recognizing it, he tried to score cheap political points by blasting a popular food chain.
Here’s what happened.
A Domino’s pizza franchise near the iconic Times Square has been selling pizza for over a dozen years. This year they sent deliveryman on foot to sell pizzas to the hundreds of thousands of revelers crammed into the area to watch the ball drop on New Year’s Eve.
The chain charged $30 for each pizza.
The mayor tweeted:
“Jacking up your prices on people trying to celebrate the holidays? Classy, @dominos.
“To the thousands who came to Times Square last night to ring in 2020, I’m sorry this corporate chain exploited you — stick it to them by patronizing one of our fantastic LOCAL pizzerias.”
Here’s what de Blasio missed. Revelers were not just paying for a pizza but for the convenience of having someone walk up and hand-deliver a hot pizza to them so they wouldn’t have to leave their viewing spot. Once inside the gated viewing areas, revelers who left were reportedly not allowed to leave and return to their original spot. Backpacks and large bags were prohibited which made it hard to pack food for the night.
The law of supply and demand–probably the most basic economic principle–was in full effect. Revelers were willing and did pay a higher-than-normal price for a pizza because their food options were limited.
If Mayor de Blasio wanted to blast Domino’s for its pizza prices, I hope he had as much energy for the hotels in and around Times Square, which raised their nightly rates, or the restaurants and movie theaters that offered views of the ball drop for a premium. The AMC movie theater on 42nd Street, for example, charged tickets to view the ball drop starting at $750 per person.
People on Twitter called out Mayor de Blasio’s select anger at Domino’s despite the New Year’s Eve upcharges at other restaurants in the area.
Furthermore, one Twitter noted that local restaurants in the area regularly charge $4 per pizza slice which comes out to $32 for a whole pizza.
Mayor de Blasio was all too quick to blast a national chain but let’s see if he holds any other businesses to the same standard.