Use a supply and demand diagram to illustrate how Uber drivers can cause prices to surge by taking coordinated breaks. Why is this strategy unlikely to work in New York, a large city with an established fleet of taxis?

Coordinated breaks refer to a situation where the drivers join hands or collude and collectively decide to reduce the supply of rental cars to increase the price. The diagram below shows the coordinated breaks.

The supply curve shifts to the left, so there will be a shortage of cars at the given price. Thus,the price increases to remove this shortage by decreasing the demand. A new equilibrium is achieved at a higher price; thus, coordinated break causes the price to surge.

New York is a big city with an established fleet of taxis. The collaboration is difficult since the area of the city is large and the customers have an alternative option, i.e., a taxi. During bad weather, not every taxi driver is off duty; some will still work. Thus, if Uber drivers coordinate breaks, the taxi drivers will grab the situation and take advantage.