Uber Surge Pricing During Blizzard Won't Happen, Because The Company Finally Learned Profiting Off Disaster Is Bad
If there's one thing Uber has become known for, it's learning their lesson the hard way. After countless scandals involving sexual assault and corporate sabotage, Uber's image plummeted even further when it surged its prices during the recent Sydney hostage crisis. Yeah, they actually did that. After issuing an apology and admitting that it was the "wrong decision," the company is turning over a new leaf with its pricing policies, announcing that Uber would not surge prices during emergencies and disasters, like the current nor'easter that's ravaging the northeastern United States. Instead, it's capping its prices, teaming with the American Red Cross, and donating part of their proceeds to help disaster relief.
Massive winter storm Juno is expected to hit a large region of states between New Jersey and Maine with up to three feet of snow on Monday and Tuesday. During this time, Uber announced, it will not be surging its prices, as it's done in past emergencies. In an email announcement, Uber says that fares will not exceed 2.8 times the normal rates. And 20 percent of those fares will be donated to the American Red Cross to support relief efforts. Uber users will see the donation listed on their receipts.
Uber explains its new price cap on its blog:
Why the sudden and generous change of policy?
This new price capping is part of a national policy Uber developed in July with New York Attorney General Eric T. Schneiderman, who had criticized and pressured the car service company for taking advantage of crises for profit. In an op-ed published in The New York Times in April, Schneiderman wrote:
The ability to pay truly exorbitant prices shouldn’t determine someone’s ability to get critical goods and services when they’re in short supply in an emergency.
Schneiderman is referring to Uber's use of surge pricing during the Hurricane Sandy disaster that left thousands of people in New York and New Jersey stranded, and some homeless, in 2012. The incident led many to accused the company of price gouging, but the company tried to justify its pricing model and algorithms nonetheless. Uber said in a statement:
While we were mostly able to avoid higher prices the day after Sandy, the reality is that under this week's extreme conditions, raising the price is the only sustainable way to maximize the number of rides and minimize the number of people stranded — by providing a meaningful incentive for drivers to come out in undesirable conditions.
Believe it or not, that's not even the worst case of Uber's price surging. Uber has also skyrocketed its fares during a state of emergency of a very different nature. During the Sydney hostage crisis last month, Uber raised its fares as much as 400 percent for people trying to escape the situation downtown. Users were charged a minimum of $100 just to use the service.
Uber later apologized for this decision, saying anyone who had to pay elevated fares in Sydney would be refunded, but the damage had already been done. It remains to be seen how Uber's new policy will reverse the epic amounts of bad press the company has received over the years.
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