This is an unfulfilling thing to say perhaps, but price gouging is actually beneficial in producing more supply when it's needed. (So long as we're speaking about a market that is not a monopoly.)<p>Why else would a cab be out during a hurricane? The world doesn't owe you a cab ride during a hurricane at an everyday price.<p>Uber points this out in their tweet, and they are correct. So let's not get our pitchforks out just yet...
As an East Village resident who fled yesterday (post-Sandy) due to loss of power and even cell service, I'm siding with Uber on this one.<p>When I needed to go 60+ blocks uptown, I didn't manage to hail a cab because every single one was taken, and only because of a private car (who separately charged three individuals for a concurrent ride, literally a 3X fare) did I manage to get to my destination without carrying my heavy duffel + gear for an hour or more in the drizzle.<p>In this situation, price is not the problem, it's supply.<p>Edit: From what I can tell, Uber now locked rates at 2X, and is eating half of the fare. That's pretty darn generous.
Relevant: <a href="http://www.computerworld.com.sg/resource/applications/why-you-dont-get-taxis-in-singapore-when-it-rains/" rel="nofollow">http://www.computerworld.com.sg/resource/applications/why-yo...</a><p>TL;DR: A study in Singapore showed that it's hard to get taxis when it rains, because rain increases the risk of accidents, which cabbies are liable for. Since there's no compensating upside to pay for the potential extra cost, the rational thing is for cabbies to sit out the storm, and that's exactly what they do.<p>The parallel to Sandy is obvious: if you want a cabbie to risk life and limb for you driving in the flooded streets after a storm, then you should compensate him accordingly. And Uber does this fairly, automatically and transparently for both sides.
This kind of dynamic pricing is precisely what we do via our REST API[0] for ecommerce shops and event providers. I can assure you that there is nothing evil about this kind of activity - it's all mathematics and economics.<p>No one at Über is looking at this and saying, "lets up our rates to make money on those hurricane victims." Some where, in some Uber server there is an algorithm that is suggesting a high multiple to keep their supply in line. I wouldn't think anything more of it than that.<p>In fact, last New Years Eve, Über reportedly capped their dynamic pricing in Washington D.C. Even though their numbers were telling them they could charge more they felt an ethical obligation to cap at 6x.<p>[0]<a href="https://github.com/Ventata/API" rel="nofollow">https://github.com/Ventata/API</a>
Who does this guy think he is telling Uber what to charge? If you don't like their price don't use them. After Hurricane Wilma I was begging for someone to "gouge" me on gas, but due to Florida law there was no gouging and thus no gas for my generator.
Price gouging? please.<p>Supply = demand = efficient distribution of resources.<p>Don't pay drivers more to drive into a disaster zone = drivers stay home and chill and nobody gets around.<p>I bet if there was real-time bidding for transportation you'd see prices go up 10x or even 100x.
There was an article on Slate that addressed the price gouging issue. The author made a lot of good points about how price gouging is a good thing in times of crises, most of which I agree with. However, in the long run, if you piss off your customers, I guess you are just shooting yourself in the foot.<p><a href="http://www.slate.com/articles/business/moneybox/2012/10/sandy_price_gouging_anti_gouging_laws_make_natural_disasters_worse.html" rel="nofollow">http://www.slate.com/articles/business/moneybox/2012/10/sand...</a>
I'm not going to type much here because I don't want to rant, but articles like these are why I quit reading TechCrunch and have never thought to read Pandodaily or any other recent startup-focused journalism site. They all just seem to prey on the stories that they can twist in whichever direction causes drama. As somebody just wanting to read about what other entrepreneurs, your average hackers, thought leaders in my areas of interest, etc are doing, I tend to just stick with HN and Twitter. I'll let the Paul Carrs of the world live out their own reality show. I mean, look at the slug in the URL of his article, even. <i>sigh</i>
The main reason I use Uber is because they always have a car available within 5 minutes in SF. If I want cheap I'll call a cab and wait 20 minutes and then call again when they don't show up.<p>Uber has always been about convenience over price. What other company says "I will disrupt industry X by charging twice the price". Here all they are doing is keeping with the same mission, make sure you can get an Uber as quickly as possible.<p>I'm for smart regulation, and I certainly agree with price gouging regulation in emergencies, but market pricing is not price gouging.
You know, this wasn't a landslide, it was a hurricane with many days notice and preparation. Why the heck are you even traveling right now?<p>Your cab rides should be costing you $400 for putting yourself or anyone else in that situation. What if a powerline fell on you or the driver?<p>Hurricane Sandy visited Cuba first, they'd love to have your $99 <a href="http://imgur.com/r/pics/mPUWZ" rel="nofollow">http://imgur.com/r/pics/mPUWZ</a>
This article is ridiculous. It's not until the last paragraph that they reveal that Uber is no longer charging 2x, instead keeping prices level and reducing their margin to increase supply.<p>It's quite likely that the increase was automatic with their dynamic pricing algorithm and when they realised the effect in a natural disaster area they corrected for it.<p>Paul Carr doesn't call himself a journalist, does he?
They utilize surge pricing during many holidays, or when big events are happening (like a music festival or a tech conference). This is no more "gouging" than any of those.
The real problem that Uber has to deal with is whether the increased supply (and marginal uptick in revenue) is worth the ensuing PR nightmare.<p>Uber already does this for days of heightened demand like NYE and Halloween. People get irritated, some enough so to blog about it (<a href="http://techcrunch.com/2012/08/19/uber-screwed-me-but-at-least-it-bought-me-breakfast/" rel="nofollow">http://techcrunch.com/2012/08/19/uber-screwed-me-but-at-leas...</a>).<p>But in the wake of Sandy, this pricing comes across as far more unscrupulous. I'd guess they didn't consider it.
Meanwhile, the District of Columbia preemptively added a $15 emergency surcharge to all cab fares for 24 hours. For a trip within the district, the fares ranged from 1.75x to 6x normal price.
NY price gouging law:<p><a href="http://codes.lp.findlaw.com/nycode/GBS/26/396-r" rel="nofollow">http://codes.lp.findlaw.com/nycode/GBS/26/396-r</a><p>In general most of the commenters here are not understanding that supply of these goods is constrained. Currently X amount of bottled water is reaching the city, and 100% of it will be sold, at any price. Currently X amount of cars for hire can transport people over the bridges, and no more can fit - the bridges have a fixed capacity. Commenters are thus making false economic arguments because they don't understand the economics, don't understand the situation, or both. Quintupling the price of bottled water and baby formula does not magically make more bottled water or baby formula appear in the city. It just takes a lot of money out of your pocket and puts it in someone else's. That's all, the only effect.
There's actually a more recent tweet than that featured in the article; seems like Uber has done the right thing ...<p>They are now paying the drivers 2X but only charging the rider the normal price...<p><a href="https://twitter.com/Uber_NYC/status/263758814061408256" rel="nofollow">https://twitter.com/Uber_NYC/status/263758814061408256</a>
You know what the irony of the situation is? Cabbies have argued against companies like Uber and advocated the more regulated method of doing business because they say that cabs can be ordered into service in times of emergency. Not sure if NYC has that power or not.
There's two issues here. First is the supply-demand balance, which several commenters have addressed (would you rather have bottled water cost $5 a bottle during Sandy or not be able to find any bottled water because "gouging" law kept it at $1?).<p>The second is that studies of cab drivers during rainstorms show that cabbies set a goal for daily earnings, and then leave the streets once they hit the goal (causing supply constraints). Would be interesting to see if uber has been able to address that psychological response in any way (tweaked incentives that give an additional bonus for driving more per month, rather than per day, for example).
I've never really understood Uber, in London there's a company called Addison Lee, do basically the same as Uber London and have for years, have loads more cars, more experience and charge about 20-30% less than Uber. I've never been to any of the other cities where Uber operates but I can't see why anyone would pay more for Uber over Addison Lee. Have I missed something?
Damn you Airbnb! You should learn from Uber raise your rates!<p><a href="http://blog.airbnb.com/waiving-fees-for-hurricane-sandyaffected-area" rel="nofollow">http://blog.airbnb.com/waiving-fees-for-hurricane-sandyaffec...</a>