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Uber
As New York City and the US Northeast hunker down for a nasty snowstorm, on-demand car service Uber is getting a chance at a bit of redemption.
The company on Monday reminded New York users that during the storm it will place a cap on its usual policy of allowing price surges in times of high demand.
Last July, Uber signed a formal agreement with the state of New York, vowing to cap its fare inflation in the face of a natural disaster or emergency. The company had been criticized for a spike in its prices during Hurricane Sandy two years ago.
“Uber is committed to getting riders safely and reliably to where they need to be, and we urge everyone to use extra caution when out on the roadways today,” an Uber spokeswoman said in a statement. “Per our national policy, during states of emergencies, dynamic pricing will be capped and proceeds from dynamically priced trips will be donated to the American Red Cross to support relief efforts.”
The snowstorm got under way Monday and threatens to dump up to three feet of snow on the Northeast before it’s done. A National Weather Service warning, which remains in effect through midnight Tuesday, describes it as a “crippling and potentially historic blizzard.”
This will be a good opportunity for Uber to prove it can stick to its agreement and garner some much-needed goodwill in the process. For months, Uber has been at the center of controversy over its policies on safety and its complicated relationship with regulators.
Uber’s pricing model is based on supply and demand — the more requests there are for cars, the higher the price for each ride. That has earned it some ill will, particularly during the wake of Hurricane Sandy, a storm in late 2012 that saw a doubling of Uber’s prices in New York City. The pricing also means high fares during more festive occasions such as New Year’s Eve or Halloween.
Competitor Lyft, which also uses a price surge model called “prime time,” cap its price at three times the normal rate, storm or no storm.
The parameters set by its disaster agreement mean that Uber will not inflate its prices past 2.8 times the normal rate, according to a letter Uber sent out to users. The company also said that wait times for cars to arrive may be longer than usual due to an expected increase of demand. The storm will also mean limited destinations.
“In areas where there is uncleared snow, driver partners may not be able to pick up or drop off riders,” the email said.
