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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.)
They could still pay the drivers more, without charging the passengers more, if they actually want people to believe they are only trying to help.
The purpose of the elastic pricing was to make sure that there was always a nice supply of drivers. Cap the prices, and you won't have as many drivers available to drive you around in the snow. Econ 101, right?
If that were the case, Uber would increase the cost and driver payment and decrease their slice (20%) so that they still make as much for providing the service but the driver/rider economics get better. Instead, they use it as an opportunity to make more money for themselves. It's still hard to say that Uber shouldn't be allowed to set prices however they want as long as riders are well aware.
The sympathy isn't for the poor, destitute, unworking American; it's for the hard worker who isn't making enough. We'd rather have 100,000 starving, jobless leeches and 20,000 upstanding, comfortable workers than 50,000 starving leeches and 70,000 struggling workers.
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