Uber Capping Prices During Snowmageddon 2015

An anonymous reader writes that yesterday Uber announced a cap on surge pricing during the mammoth snow storm hitting the northeast this week; there will still be surge pricing, but it will be capped at 2.8 times the usual fares. The cap comes after an agreement struck between Uber and the New York City Attorney General’s office in January 2014 that required Uber to limit prices during “abnormal disruptions of the market”, including emergencies and natural disasters. Uber also announced a national policy for its price limits during those emergencies. ... While Uber plans to limit dynamic pricing during this storm, the company has had a bad history with emergency situations and surge pricing. In late 2012, Uber received criticism for raising fares during Hurricane Sandy. (The agreement with the NY AG came in part as a result of Hurricane Sandy backlash.)

Comments

Driving ban

[silas_moeckel]

Most of the affected area seems to have one.

Re:So what will this accomplish?

[Tom]

In Econ 101 you also learn about horizontal and vertical pricing.

Basically, if the surge price is reasonably high, most drivers will be available. From 1.0 to 1.5 you may raise the number of drivers considerably, but from 3.0 to 3.5 you will probably not motivate many more drivers to go out and drive - most available drivers will already be on the road, and the few who decide against it will not change their mind here because if 3.0 doesn't motivate them, then 3.5 most likely won't because they have important reasons to stay home.

A cap on such elastic pricing is almost always a good idea.