Uber has announced that it won't charge New Yorkers more than 2.8 times the normal fare as they try to navigate the city through the 10 inches of snow that fell Monday night. The policy comes after the company was inundated with criticism, including from the New York attorney general for taking advantage of New Yorkers caught in Hurricane Sandy, charging them hundreds of dollars more for taking a ride that would normally be a fraction of the cost.
The San Francisco-based startup has come under fire for employing a strategy known as surge pricing, or dynamic pricing, in which the cost of a ride fluctuates depending on how many Uber cars are on the road. When drivers' workload goes up – like on busy holidays, popular party nights, or in an emergency – so does the cost of hailing an Uber. Yet the tactic has also created problems for Uber, earning the company an F rating from the Better Business Bureau and the “exploitative” label from lawmakers who have had to remind the company that price gouging in an emergency is against the law.
The company was most recently criticized for hiking fares during a hostage crisis in Sydney, Australia.
If the New York City blizzard is any indication, though, then it appears as if Uber may have learned its lesson. Uber said in a statement Monday to Bloomberg Businessweek that “dynamic pricing will be capped” and that it will donate 20 percent of its fare totals to the American Red Cross under the terms of a deal with the New York State Attorney General's office.
New York City taxis do not increase their fares during times or emergency, and announced Monday they would be offering free rides to emergency workers as well as the elderly and disabled during the blizzard.