Uber surge pricing criticised as people flee Hurricane Sandy
Uber faced a massive backlash to its surge pricing model during Hurricane Sandy, prompting accusations of price gouging as fares doubled in New York City. Public reaction was highly negative, with many customers expressing outrage on social media, perceiving Uber's pricing strategy as exploitative. Uber's CEO, Travis Kalanick, defended the policy, arguing that higher prices were necessary to incentivise more drivers to operate during the storm, thereby increasing ride availability. In response to the criticism, Uber initially subsidised fares by paying drivers double while charging passengers the standard rate, reputedly costing the company over USD 100,000 per day. Eventually, it reverted to surge pricing but claimed that all fare increases would go directly to drivers, waiving their own fees during the emergency. In the aftermath of the criticism, Uber agreed to implement a cap on surge pricing during emergencies, limiting fare increases to avoid similar backlash in the future. The policy change was part of an agreement with New York's Attorney General to comply with state laws against price gouging, ensuring that prices would not exceed a certain multiple of the normal fare during disasters. Dynamic pricing Dynamic pricing, also referred to as surge pricing, demand pricing, or time-based pricing, and variable pricing is a revenue management pricing strategy in which businesses set flexible prices for products or services based on current market demands. Source: Wikipedia 🔗 System 🤖 Uber surge pricing Documents 📃 Uber. Hurricane Sandy pricing update Operator: Developer: Uber Country: USA Sector: Transport/logistics Purpose: Calculate price Technology: Pricing algorithm Issue: Ethics/values; Fairness
- Date it happened
- 2012-10-01
- Organisation involved
- Uber
- Product, system or model
- Uber surge pricing
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