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Uber Increases Fares 2x in NYC

53 points by Dramatize 14y ago

danielamitay 14y ago
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. 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. In this situation, price is not the problem, it's supply. Edit: From what I can tell, Uber now locked rates at 2X, and is eating half of the fare. That's pretty darn generous.
- Apreche 14y ago
  There are price gouging laws against this specific activity. You can not raise prices during a disaster. I hope Uber gets shafted to the full extent. This is what you sound like: When I needed to eat all the bread in the grocery store was gone. Except for this one grocery store that was charging $100 a loaf. They filled my belly when everyone else was sold out. What a good grocery store!
  - danielamitay 14y ago
    If that bread is being imported from outside the city, then yes. What a good grocery store. Per Uber (and even PandoDaily), the available driver supply has indeed risen due to prices. Without the price increase, some drivers wouldn't consider it worth the painful traffic. And lets not forget: It's not like the folks at Uber flipped a switch and doubled the rates. Their system responds to demand automatically--it doesn't know when there is a disaster.
    - mikescar 14y ago
      Well, Uber knows there is a disaster. A large temporary change in the NYC cab market would not go unnoticed. They can update their own 'system' to reflect current prices, it's not a third-party thing.
    - janezhu 14y ago
      "...Uber finally backed down and agreed to pay drivers an increased rate but keep fares at their normal leves" The outrage here stems from the fact that people do not perceive Uber as the corner grocery store, or some guy on the corner selling umbrellas at twice their cost when its raining. Uber is perceived, as most startups are, as a "good guy," an entity who would try first and foremost to help during a crisis before trying to make a profit. If they had done this (eat the losses) from the beginning not only could they have avoided the bad press but probably gotten enough good pr to increase their customer base.
      - janezhu 14y ago
        it's a shame to see the headline right below this thread is "Airbnb waives fees for Hurricane Sandy affected area."
        sp332 14y ago
        Uber is also waiving their fees. 100% of the money is going to the drivers. http://news.ycombinator.com/item?id=4728851 http://news.ycombinator.com/item?id=4728851
      - Tuna-Fish 14y ago
        > The outrage here stems from the fact Or more likely, it stems from the fact that some people understand economics and some don't. You want prices to go up in an emergency, because it creates incentives to go beyond usual measures to provide supply. Anti-gouging laws are not just useless, they are mindbogglingly harmful. There's a good reason you don't set ceilings on prices during usual times: If the cost of supply goes above set price, there is no supply and people have to go without. The pricing mechanism still works and is even more important when there is an emergency. If conditions make providing supply hard and legislation limits the prices to a set ceiling, retailers aren't going to eat the cost of providing supply, they are just going to say that it's too hard and close up for the duration. If prices are allowed to rise naturally, it incentivizes not just going above and beyond to get goods where they need to be, but also stockpiling supplies before the disaster. Price gouging is a good thing, because the choice is not between very expensive bread and non-gouged bread, but between very expensive bread and no bread. If there was enough supply to provide for all demand during the crisis, prices wouldn't go up.
  - ecliptic 14y ago
    If I can't raise prices when the risk is higher then you can walk.
  - smokeyj 14y ago
    Sounds like you've never heard of supply and demand.
    - jlgreco 14y ago
      I suspect he has heard of it, he just doesn't like it and expects companies to operate as though it does not exist.
  - pbiggar 14y ago
    I lean very heavily socialist, but I can't see how anyone would benefit from there being no cars available. Actually, I recall just such an occasion, in Dublin at 4am New Years eve when there was a surprise snowfall. Tens of thousands of people in the city center, taxis weren't running, buses weren't running, and there was no way for many to get home. The worst I saw was girls in skimpy dresses holding their heels in their hands as they walked a few miles home in the snow and ice. They would have been glad to be "gouged" for a taxi.
    - rprospero 14y ago
      As a supporter of price gouging laws, the idea isn't that there should be no cars. No one expects UberCar to look at the situation, say "We're losing $X million per day. Oh well." and keep sending cars out on the street. The plan for price gouging laws is for Uber to say "We're losing $X million per day and our Hurricane insurance will pay out $Y million. This will leave us $Z million ahead." The problem is that, for Uber, Y = 0. Under the price gouging model, every company would be charging extra on a daily basis outside of emergencies to either buy insurance or build a safety fund to use during disasters. Instead of gouging some guy $100 after a hurricane, Uber is expected to gouge everyone 25¢ year round. This slows the economy during the good times, but keeps things running smoothly in the bad. Whether or not this is a good model is freely debately, but that's how it was intended to work.
      - pbiggar 14y ago
        Uber don't control the cars or employ the drivers, and can't force their drivers to be out on the street. They have a very good mechanism for ensuring supply during high demand: allow their drivers to charge more. I see that it would be possible for them to have a hurricane fund which they would use to encourage the drivers to come out, but I don't think its fair to expect them to have expected this. To be honest, I don't see this as gouging. Its a 2-sided marketplace, and there are pretty simple economics at play.
  - andylei 14y ago
    When I needed to eat, all the bread in the grocery store was gone. But they were only a penny a loaf! I starved, but seriously, what a good grocery store! Only a penny! Is that your alternative?
    - pyoung 14y ago
      And to add insult to injury/starvation: the person who got to the store first probably bought 10x more food then they needed and now has a bunch of food spoiling in their non-functioning refrigerator.
  - cdrxndr 14y ago
    All the responses about supply and demand aren't accounting for the fact that taxi drivers are a protected industry in New York. You are unionized, have benefits, and have protections preventing any ol' person from starting a taxi service that are VERY COSTLY to NY residents. But it ensures a safe and mutually beneficial industry. So a big fuck you to anyone who price gouges. I hope you lose the medallion, lose your job, and lose your benefits. Cheers.
    - astine 14y ago
      My understanding is that Uber drivers don't have medalions. They compete with the protected taxis.
    - arkem 14y ago
      Uber isn't a taxi company. The supply being talked about isn't necessarily about the limited number of taxi medallions issued. Instead, it's about how private car operators don't want to work in NYC right now but might be induced to work if they were payed more. I'm not sure what you're getting at in your comment. Are you complaining about Uber raising their prices, or about Uber existing at all?
    - danielweber 14y ago
      Uber isn't a taxi company and doesn't have the protected industry status.
  - jasonlingx 14y ago
    You feel entitled to a cab at the same price even though it's a disaster and everyone needs a cab. Drivers feel entitled not to have to drive into a disaster zone for the same price and would rather stay home. So either way, whether or not prices are raised or prices stayed the same, the result to you and everyone who feels similarly entitled, would be the same - walk home. At least by raising prices, those who are willing to pay the higher price will be able to get a cab.
  - marcamillion 14y ago
    Wow...this rational sounds so irrational. Simple economics tells us that when demand far exceeds supply, prices rise. A natural disaster will cause prices for many things to increase. There is MUCH more social utility for Uber to double & triple prices to ensure there are private cars (i.e. supply) than leaving tons of people stranded. It's just the market at work....no need to attack them, just don't pay the rate. If you are stuck on the corner, and water is headed your way, I can guarantee you - you would pay almost anything to get out of there. Just paying 2X or 3X - depending on your perspective - is almost a steal. I don't live in NYC, nor am I an Uber customer - but if I were stranded in NYC and wanted to leave, I would be glad to pay any rate I could afford.
  - deleted 14y ago
    [deleted]
jauer 14y ago
Is anyone else getting the feeling that Pando/Carr has it in for Uber? The past few articles I've seen from them came off as unreasonably negative.
- codewright 14y ago
  >Is anyone else getting the feeling that Pando/Carr has it in for Uber? From what I've seen so far, yes. I've gotta say, I don't really like anybody in this little drama at the moment though. Carr or the car.
- 46Bit 14y ago
  I think Carr is very uncomfortable with where services like Uber are taking us. Specifically the notion that we're headed for a world with a much starker rich/poor divide, due to power becoming more concentrated in the hands of companies like Uber whilst the drivers just do what they're told. He's not necessarily wrong in my view, yet I'm unsure what he's trying to do but bitch about it. It's a problem, yet at the same time it's something of an opportunity to do amazing things when governments no longer have the will or apparent wealth.
  - pbiggar 14y ago
    I would like to hear more about this rich/poor divide and how Uber takes us there?
    - 46Bit 14y ago
      He goes overboard by the end, but: http://pandodaily.com/2012/10/24/travis-shrugged/ http://pandodaily.com/2012/10/24/travis-shrugged/
      - pbiggar 14y ago
        I read that, overboard is quite the understatement. To spare me rereading the whole thing, are there specific parts that point to a rich/poor divide?
mikeland86 14y ago
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. 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. I'm for smart regulation, and I certainly agree with price gouging regulation in emergencies, but market pricing is not price gouging.
ericmason 14y ago
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.
- FireBeyond 14y ago
  What makes you feel you're more entitled to have gas for your generator in an emergency than someone who can only afford a smaller multiple? Should you also have priority access to fire and EMS if you can afford to pay a bit more when need is high?
nostromo 14y ago
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.) 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. Uber points this out in their tweet, and they are correct. So let's not get our pitchforks out just yet...
- dave5104 14y ago
  Except the hurricane is done. Uber is taking advantage of the fact that lower Manhattan is pretty inaccessible via public transportation.
  - jvm 14y ago
    But there is still a transportation shortage. This provides an accessible option for those who are willing to pay. The alternative for most people is not finding a car at all.
  - mst 14y ago
    Just because we believe "the hurricane is done" doesn't mean it's reasonable to expect a driver to want to drive into the area for their normal rate.
- SqMafia 14y ago
  Cabbies can also get paid more if Uber takes a smaller cut for the time being. That would have been a good PR move too. This is a bit of a wasted opportunity to get good PR.
  - janezhu 14y ago
    That's exactly what they did after the flood of negative press. I live in the Lower East Side and even without the stoplights there are traffic cops directing and it is generally safe walking and driving downtown with no water and debris in the streets. Yellow cabs and black cabs are already hiking up their prices and "negotiating" with passengers so it would have been nice to see Uber step up in this case.
pyoung 14y ago
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. http://www.slate.com/articles/business/moneybox/2012/10/sandy_price_gouging_anti_gouging_laws_make_natural_disasters_worse.html http://www.slate.com/articles/business/moneybox/2012/10/sand...
jpatokal 14y ago
Relevant: http://www.computerworld.com.sg/resource/applications/why-you-dont-get-taxis-in-singapore-when-it-rains/ http://www.computerworld.com.sg/resource/applications/why-yo... 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. 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.
jasonlingx 14y ago
Price gouging? please. Supply = demand = efficient distribution of resources. Don't pay drivers more to drive into a disaster zone = drivers stay home and chill and nobody gets around. I bet if there was real-time bidding for transportation you'd see prices go up 10x or even 100x.
ck2 14y ago
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? 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? Hurricane Sandy visited Cuba first, they'd love to have your $99 http://imgur.com/r/pics/mPUWZ http://imgur.com/r/pics/mPUWZ
- yin 14y ago
  Devastation has hit NYC in zones that were not forecast to deem mandatory evacuation. As it turns out, the hurricane had caused greater devastation than expected and many people are unexpectedly experiencing loss of water and power and some loss of life. So in response to your first statement, no, most people did not know their areas would be in the path of danger. They are traveling now because where they are now is not habitable. In response to the concept of supply and demand, yes, that is generally how the economy works. If NYC is in a higher demand for private car service, then it will likely cost more to get more drivers on the road. I don't think the question at this point is why people are looking for relief via traveling - it should be why are they seeking help and how can we help.
ljd 14y ago
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. 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. 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. [0]https://github.com/Ventata/API https://github.com/Ventata/API
- jellicle 14y ago
  No, you don't get to "blame the computer" in 2012. That's so 1990. While you may think there is "nothing evil" about it, a great deal of the population and, generally, the NY Legislature, disagree.
  - ljd 14y ago
    I apologize if my response came off as "blaming the computer." I'm unsure of what the 1990 references is about but I just want to help anyone that wants to understand how this works. I'll be more clear, our dynamic pricing algorithms are just listening to how much you, as the consumer, wants to pay for a product. Don't want to pay 100% markup on a product? Don't buy it and the machines will just drop the price. No one is being evil, not a machine or a person. It's just charging market price; every consumers' decision to buy or not to buy impact the price. Über is no different. Don't want to pay 2x? Don't and their algorithms will drop the price as fast as it went up.
Skywing 14y ago
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. sigh
baddox 14y ago
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.
colinbartlett 14y ago
As a laissez faire capitalist, I say "bill 'em all and let god sort it out".
SqMafia 14y ago
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.
- jpatokal 14y ago
  No, those arguments are trotted out by the companies that hold the precious taxi medallions (~$1m a pop) and lease them to cabbies at extortionate rates. The cabbies themselves are, for most part, happier working for Uber than their current masters. See also: http://www.slate.com/articles/business/moneybox/2012/06/taxi_medallions_how_new_york_s_terrible_taxi_system_makes_fares_higher_and_drivers_poorer_.html http://www.slate.com/articles/business/moneybox/2012/06/taxi...
colmvp 14y ago
Damn you Airbnb! You should learn from Uber raise your rates! http://blog.airbnb.com/waiving-fees-for-hurricane-sandyaffected-area http://blog.airbnb.com/waiving-fees-for-hurricane-sandyaffec...
kapilkale 14y ago
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. Uber already does this for days of heightened demand like NYE and Halloween. People get irritated, some enough so to blog about it (http://techcrunch.com/2012/08/19/uber-screwed-me-but-at-least-it-bought-me-breakfast/ http://techcrunch.com/2012/08/19/uber-screwed-me-but-at-leas...). But in the wake of Sandy, this pricing comes across as far more unscrupulous. I'd guess they didn't consider it.
mlchild 14y ago
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?). 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).
- corford 14y ago
  >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? If I had the $5 I'd rather they gouge me. On the other hand, if I had only $1 at least there's a chance I could get a bottle if the price stayed at $1. To me, the supply and demand argument seems to ultimately boil down to a simple survival of the fittest scenario where "fittest" is determined by wealth. Ethical me hates that (at least for essential goods like water, food, fuel). But selfish, "I've just survived a major natural disaster and need some f*ing water!" me wouldn't have a problem with gouging. Tricky!
nedwin 14y ago
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. 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. Paul Carr doesn't call himself a journalist, does he?
- illuminate 14y ago
  Sad that I had to get this far in the discussion to find that out. RTFA or not, a lot of people develop opinions based on posted comments before they read the article, ~if~ they even read the article.
brownbat 14y ago
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.
jellicle 14y ago
NY price gouging law: http://codes.lp.findlaw.com/nycode/GBS/26/396-r http://codes.lp.findlaw.com/nycode/GBS/26/396-r 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.
- marcamillion 14y ago
  Except that as far as I understand it, in this case, doubling the price does increase the supply. i.e. by charging $99 for a $49 ride, provides a strong incentive for drivers in nearby cities to leave their current market and go to NYC. So that DOES help the situation. I am not sure if this is what you were arguing, but I thought I would provide some clarity :)
  - jellicle 14y ago
    New York City's streets and bridges are FULL. If the driver from another city comes to NYC, an NYC driver is no longer able to enter the city. No additional supply is created. I'm not sure why this is such a difficult concept to grasp.
damian2000 14y ago
There's actually a more recent tweet than that featured in the article; seems like Uber has done the right thing ... They are now paying the drivers 2X but only charging the rider the normal price... https://twitter.com/Uber_NYC/status/263758814061408256 https://twitter.com/Uber_NYC/status/263758814061408256
samarudge 14y ago
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?

53 points by Dramatize 14y ago

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. 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. In this situation, price is not the problem, it's supply. Edit: From what I can tell, Uber now locked rates at 2X, and is eating half of the fare. That's pretty darn generous.

Apreche 14y ago
There are price gouging laws against this specific activity. You can not raise prices during a disaster. I hope Uber gets shafted to the full extent. This is what you sound like: When I needed to eat all the bread in the grocery store was gone. Except for this one grocery store that was charging $100 a loaf. They filled my belly when everyone else was sold out. What a good grocery store!
- danielamitay 14y ago
  If that bread is being imported from outside the city, then yes. What a good grocery store. Per Uber (and even PandoDaily), the available driver supply has indeed risen due to prices. Without the price increase, some drivers wouldn't consider it worth the painful traffic. And lets not forget: It's not like the folks at Uber flipped a switch and doubled the rates. Their system responds to demand automatically--it doesn't know when there is a disaster.
  - mikescar 14y ago
    Well, Uber knows there is a disaster. A large temporary change in the NYC cab market would not go unnoticed. They can update their own 'system' to reflect current prices, it's not a third-party thing.
  - janezhu 14y ago
    "...Uber finally backed down and agreed to pay drivers an increased rate but keep fares at their normal leves" The outrage here stems from the fact that people do not perceive Uber as the corner grocery store, or some guy on the corner selling umbrellas at twice their cost when its raining. Uber is perceived, as most startups are, as a "good guy," an entity who would try first and foremost to help during a crisis before trying to make a profit. If they had done this (eat the losses) from the beginning not only could they have avoided the bad press but probably gotten enough good pr to increase their customer base.
    - janezhu 14y ago
      it's a shame to see the headline right below this thread is "Airbnb waives fees for Hurricane Sandy affected area."
      - sp332 14y ago
        Uber is also waiving their fees. 100% of the money is going to the drivers. http://news.ycombinator.com/item?id=4728851 http://news.ycombinator.com/item?id=4728851
    - Tuna-Fish 14y ago
      > The outrage here stems from the fact Or more likely, it stems from the fact that some people understand economics and some don't. You want prices to go up in an emergency, because it creates incentives to go beyond usual measures to provide supply. Anti-gouging laws are not just useless, they are mindbogglingly harmful. There's a good reason you don't set ceilings on prices during usual times: If the cost of supply goes above set price, there is no supply and people have to go without. The pricing mechanism still works and is even more important when there is an emergency. If conditions make providing supply hard and legislation limits the prices to a set ceiling, retailers aren't going to eat the cost of providing supply, they are just going to say that it's too hard and close up for the duration. If prices are allowed to rise naturally, it incentivizes not just going above and beyond to get goods where they need to be, but also stockpiling supplies before the disaster. Price gouging is a good thing, because the choice is not between very expensive bread and non-gouged bread, but between very expensive bread and no bread. If there was enough supply to provide for all demand during the crisis, prices wouldn't go up.
- ecliptic 14y ago
  If I can't raise prices when the risk is higher then you can walk.
- smokeyj 14y ago
  Sounds like you've never heard of supply and demand.
  - jlgreco 14y ago
    I suspect he has heard of it, he just doesn't like it and expects companies to operate as though it does not exist.
- pbiggar 14y ago
  I lean very heavily socialist, but I can't see how anyone would benefit from there being no cars available. Actually, I recall just such an occasion, in Dublin at 4am New Years eve when there was a surprise snowfall. Tens of thousands of people in the city center, taxis weren't running, buses weren't running, and there was no way for many to get home. The worst I saw was girls in skimpy dresses holding their heels in their hands as they walked a few miles home in the snow and ice. They would have been glad to be "gouged" for a taxi.
  - rprospero 14y ago
    As a supporter of price gouging laws, the idea isn't that there should be no cars. No one expects UberCar to look at the situation, say "We're losing $X million per day. Oh well." and keep sending cars out on the street. The plan for price gouging laws is for Uber to say "We're losing $X million per day and our Hurricane insurance will pay out $Y million. This will leave us $Z million ahead." The problem is that, for Uber, Y = 0. Under the price gouging model, every company would be charging extra on a daily basis outside of emergencies to either buy insurance or build a safety fund to use during disasters. Instead of gouging some guy $100 after a hurricane, Uber is expected to gouge everyone 25¢ year round. This slows the economy during the good times, but keeps things running smoothly in the bad. Whether or not this is a good model is freely debately, but that's how it was intended to work.
    - pbiggar 14y ago
      Uber don't control the cars or employ the drivers, and can't force their drivers to be out on the street. They have a very good mechanism for ensuring supply during high demand: allow their drivers to charge more. I see that it would be possible for them to have a hurricane fund which they would use to encourage the drivers to come out, but I don't think its fair to expect them to have expected this. To be honest, I don't see this as gouging. Its a 2-sided marketplace, and there are pretty simple economics at play.
- andylei 14y ago
  When I needed to eat, all the bread in the grocery store was gone. But they were only a penny a loaf! I starved, but seriously, what a good grocery store! Only a penny! Is that your alternative?
  - pyoung 14y ago
    And to add insult to injury/starvation: the person who got to the store first probably bought 10x more food then they needed and now has a bunch of food spoiling in their non-functioning refrigerator.
- cdrxndr 14y ago
  All the responses about supply and demand aren't accounting for the fact that taxi drivers are a protected industry in New York. You are unionized, have benefits, and have protections preventing any ol' person from starting a taxi service that are VERY COSTLY to NY residents. But it ensures a safe and mutually beneficial industry. So a big fuck you to anyone who price gouges. I hope you lose the medallion, lose your job, and lose your benefits. Cheers.
  - astine 14y ago
    My understanding is that Uber drivers don't have medalions. They compete with the protected taxis.
  - arkem 14y ago
    Uber isn't a taxi company. The supply being talked about isn't necessarily about the limited number of taxi medallions issued. Instead, it's about how private car operators don't want to work in NYC right now but might be induced to work if they were payed more. I'm not sure what you're getting at in your comment. Are you complaining about Uber raising their prices, or about Uber existing at all?
  - danielweber 14y ago
    Uber isn't a taxi company and doesn't have the protected industry status.
- jasonlingx 14y ago
  You feel entitled to a cab at the same price even though it's a disaster and everyone needs a cab. Drivers feel entitled not to have to drive into a disaster zone for the same price and would rather stay home. So either way, whether or not prices are raised or prices stayed the same, the result to you and everyone who feels similarly entitled, would be the same - walk home. At least by raising prices, those who are willing to pay the higher price will be able to get a cab.
- marcamillion 14y ago
  Wow...this rational sounds so irrational. Simple economics tells us that when demand far exceeds supply, prices rise. A natural disaster will cause prices for many things to increase. There is MUCH more social utility for Uber to double & triple prices to ensure there are private cars (i.e. supply) than leaving tons of people stranded. It's just the market at work....no need to attack them, just don't pay the rate. If you are stuck on the corner, and water is headed your way, I can guarantee you - you would pay almost anything to get out of there. Just paying 2X or 3X - depending on your perspective - is almost a steal. I don't live in NYC, nor am I an Uber customer - but if I were stranded in NYC and wanted to leave, I would be glad to pay any rate I could afford.
- deleted 14y ago
  [deleted]

jauer 14y ago

Is anyone else getting the feeling that Pando/Carr has it in for Uber? The past few articles I've seen from them came off as unreasonably negative.

codewright 14y ago
>Is anyone else getting the feeling that Pando/Carr has it in for Uber? From what I've seen so far, yes. I've gotta say, I don't really like anybody in this little drama at the moment though. Carr or the car.
46Bit 14y ago
I think Carr is very uncomfortable with where services like Uber are taking us. Specifically the notion that we're headed for a world with a much starker rich/poor divide, due to power becoming more concentrated in the hands of companies like Uber whilst the drivers just do what they're told. He's not necessarily wrong in my view, yet I'm unsure what he's trying to do but bitch about it. It's a problem, yet at the same time it's something of an opportunity to do amazing things when governments no longer have the will or apparent wealth.
- pbiggar 14y ago
  I would like to hear more about this rich/poor divide and how Uber takes us there?
  - 46Bit 14y ago
    He goes overboard by the end, but: http://pandodaily.com/2012/10/24/travis-shrugged/ http://pandodaily.com/2012/10/24/travis-shrugged/
    - pbiggar 14y ago
      I read that, overboard is quite the understatement. To spare me rereading the whole thing, are there specific parts that point to a rich/poor divide?

mikeland86 14y ago

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. 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. I'm for smart regulation, and I certainly agree with price gouging regulation in emergencies, but market pricing is not price gouging.

ericmason 14y ago

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.

FireBeyond 14y ago
What makes you feel you're more entitled to have gas for your generator in an emergency than someone who can only afford a smaller multiple? Should you also have priority access to fire and EMS if you can afford to pay a bit more when need is high?

nostromo 14y ago

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.) 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. Uber points this out in their tweet, and they are correct. So let's not get our pitchforks out just yet...

dave5104 14y ago
Except the hurricane is done. Uber is taking advantage of the fact that lower Manhattan is pretty inaccessible via public transportation.
- jvm 14y ago
  But there is still a transportation shortage. This provides an accessible option for those who are willing to pay. The alternative for most people is not finding a car at all.
- mst 14y ago
  Just because we believe "the hurricane is done" doesn't mean it's reasonable to expect a driver to want to drive into the area for their normal rate.
SqMafia 14y ago
Cabbies can also get paid more if Uber takes a smaller cut for the time being. That would have been a good PR move too. This is a bit of a wasted opportunity to get good PR.
- janezhu 14y ago
  That's exactly what they did after the flood of negative press. I live in the Lower East Side and even without the stoplights there are traffic cops directing and it is generally safe walking and driving downtown with no water and debris in the streets. Yellow cabs and black cabs are already hiking up their prices and "negotiating" with passengers so it would have been nice to see Uber step up in this case.

pyoung 14y ago

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. http://www.slate.com/articles/business/moneybox/2012/10/sandy_price_gouging_anti_gouging_laws_make_natural_disasters_worse.html http://www.slate.com/articles/business/moneybox/2012/10/sand...

jpatokal 14y ago

Relevant: http://www.computerworld.com.sg/resource/applications/why-you-dont-get-taxis-in-singapore-when-it-rains/ http://www.computerworld.com.sg/resource/applications/why-yo... 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. 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.

jasonlingx 14y ago

Price gouging? please. Supply = demand = efficient distribution of resources. Don't pay drivers more to drive into a disaster zone = drivers stay home and chill and nobody gets around. I bet if there was real-time bidding for transportation you'd see prices go up 10x or even 100x.

ck2 14y ago

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? 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? Hurricane Sandy visited Cuba first, they'd love to have your $99 http://imgur.com/r/pics/mPUWZ http://imgur.com/r/pics/mPUWZ

yin 14y ago
Devastation has hit NYC in zones that were not forecast to deem mandatory evacuation. As it turns out, the hurricane had caused greater devastation than expected and many people are unexpectedly experiencing loss of water and power and some loss of life. So in response to your first statement, no, most people did not know their areas would be in the path of danger. They are traveling now because where they are now is not habitable. In response to the concept of supply and demand, yes, that is generally how the economy works. If NYC is in a higher demand for private car service, then it will likely cost more to get more drivers on the road. I don't think the question at this point is why people are looking for relief via traveling - it should be why are they seeking help and how can we help.

ljd 14y ago

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. 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. 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. [0]https://github.com/Ventata/API https://github.com/Ventata/API

jellicle 14y ago
No, you don't get to "blame the computer" in 2012. That's so 1990. While you may think there is "nothing evil" about it, a great deal of the population and, generally, the NY Legislature, disagree.
- ljd 14y ago
  I apologize if my response came off as "blaming the computer." I'm unsure of what the 1990 references is about but I just want to help anyone that wants to understand how this works. I'll be more clear, our dynamic pricing algorithms are just listening to how much you, as the consumer, wants to pay for a product. Don't want to pay 100% markup on a product? Don't buy it and the machines will just drop the price. No one is being evil, not a machine or a person. It's just charging market price; every consumers' decision to buy or not to buy impact the price. Über is no different. Don't want to pay 2x? Don't and their algorithms will drop the price as fast as it went up.

Skywing 14y ago

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. sigh

baddox 14y ago

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.

colinbartlett 14y ago

As a laissez faire capitalist, I say "bill 'em all and let god sort it out".

SqMafia 14y ago

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.

jpatokal 14y ago
No, those arguments are trotted out by the companies that hold the precious taxi medallions (~$1m a pop) and lease them to cabbies at extortionate rates. The cabbies themselves are, for most part, happier working for Uber than their current masters. See also: http://www.slate.com/articles/business/moneybox/2012/06/taxi_medallions_how_new_york_s_terrible_taxi_system_makes_fares_higher_and_drivers_poorer_.html http://www.slate.com/articles/business/moneybox/2012/06/taxi...

colmvp 14y ago

Damn you Airbnb! You should learn from Uber raise your rates! http://blog.airbnb.com/waiving-fees-for-hurricane-sandyaffected-area http://blog.airbnb.com/waiving-fees-for-hurricane-sandyaffec...

kapilkale 14y ago

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. Uber already does this for days of heightened demand like NYE and Halloween. People get irritated, some enough so to blog about it (http://techcrunch.com/2012/08/19/uber-screwed-me-but-at-least-it-bought-me-breakfast/ http://techcrunch.com/2012/08/19/uber-screwed-me-but-at-leas...). But in the wake of Sandy, this pricing comes across as far more unscrupulous. I'd guess they didn't consider it.

mlchild 14y ago

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?). 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).

corford 14y ago
>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? If I had the $5 I'd rather they gouge me. On the other hand, if I had only $1 at least there's a chance I could get a bottle if the price stayed at $1. To me, the supply and demand argument seems to ultimately boil down to a simple survival of the fittest scenario where "fittest" is determined by wealth. Ethical me hates that (at least for essential goods like water, food, fuel). But selfish, "I've just survived a major natural disaster and need some f*ing water!" me wouldn't have a problem with gouging. Tricky!

nedwin 14y ago

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. 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. Paul Carr doesn't call himself a journalist, does he?

illuminate 14y ago
Sad that I had to get this far in the discussion to find that out. RTFA or not, a lot of people develop opinions based on posted comments before they read the article, ~if~ they even read the article.

brownbat 14y ago

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.

jellicle 14y ago

NY price gouging law: http://codes.lp.findlaw.com/nycode/GBS/26/396-r http://codes.lp.findlaw.com/nycode/GBS/26/396-r 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.

marcamillion 14y ago
Except that as far as I understand it, in this case, doubling the price does increase the supply. i.e. by charging $99 for a $49 ride, provides a strong incentive for drivers in nearby cities to leave their current market and go to NYC. So that DOES help the situation. I am not sure if this is what you were arguing, but I thought I would provide some clarity :)
- jellicle 14y ago
  New York City's streets and bridges are FULL. If the driver from another city comes to NYC, an NYC driver is no longer able to enter the city. No additional supply is created. I'm not sure why this is such a difficult concept to grasp.

damian2000 14y ago

There's actually a more recent tweet than that featured in the article; seems like Uber has done the right thing ... They are now paying the drivers 2X but only charging the rider the normal price... https://twitter.com/Uber_NYC/status/263758814061408256 https://twitter.com/Uber_NYC/status/263758814061408256

samarudge 14y ago

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?