9 ms·

Uber backtracks after jacking up prices during Sydney hostage crisis

47 points by unreal37 12y ago

fludlight 12y ago
One man's price gouging is another man's hazard pay.
- chris_wot 12y ago
  There was no danger in driving someone out of the Sydney CBD.
  - fludlight 12y ago
    Demand to leave was abnormally high because of a perceived threat to public safety. Keyword: perceived. Regression to the mean applies to panic as well. With a large enough sample size, all humans, wether they be passengers or drivers are susceptible to fear in the same ways.
  - mikeash 12y ago
    It's not the driving out that's problematic, it's the driving in to pick people up. The danger seems to have been way overblown, but that applies to both sides of this particular interaction.
DigitalSea 12y ago
This story really highlights just how far the media witch hunt against Uber has gone. The story basically calls out Uber for its surge pricing strategy which kicked in during a siege in a Sydney, Australia cafe. People in the area were clearing out and catching Uber's. Because of the increased demand, Uber's automatic surge pricing kicked in. This story makes it sound like Uber deliberately turned on surge pricing to capitalise on what was going on, which is not the case. Those who have used Uber before know this is an automatic mechanism, simple supply and demand, which in most cases makes sense. It is just unfortunate that this happened when this hostage crisis was taking place. Surge pricing is and always has been an automatic thing. It isn't something that someone in an Uber office switches on when they notice an increase in demand or a crisis going on they can take advantage of. Uber are a pretty questionable company who have done some rather questionable things, in this situation, Uber did everything right (for the most part). While I understand the fear is real from some of the people fleeing, the people actually being held captive in cafe were the ones we should be focusing on, not the people fleeing who were safe surrounded by. Calling an Uber in a crisis is the last thing I would honestly be doing, I would be calling an actual taxi because I know there are more taxis than Uber's in Sydney. As unfortunate as it might be, the system works for the most part. Obviously there were a lack of vehicles in the vicinity of the siege, the system realised this and compensated by increasing the cost. The alternative in this situation if there was no surge pricing, there would be no additional vehicles to meet the demand which means people have no transport. It is also worth noting the drivers get paid more when surge pricing is in effect, the incentive of more money brings drivers from further away into the area. And you know what, once Uber found out what was happening, they made all rides in the Sydney area free which they didn't have to do. Does this sound the like an action of a company trying to capitalise on a crisis? I don't think so. If Uber didn't reverse surge pricing in the area, then yes, I would be calling them out like everyone else, but as soon as they noticed, they made all rides free and offered refunds to anyone charged surge prices. Anything for a story, right? I think Uber could have handled the PR around this so much better, especially keeping the public in the loop around complexities (if any) of turning off surge pricing or making rides free. I think this also highlights Uber need to consider pricing caps on surge pricing, a 4x increase is just ridiculous crisis or no crisis. I have heard of some parts of the US which have hit a 6x increase before and then Uber intervenes and caps it. A fine piece of shoddy journalism. Shame on you Washington Post and every other media outlet making this into a far bigger issue than it actually is.
- cjoh 12y ago
  This wasn't an "automatic price increase" unless software got really good at explaining why they were increasing prices. http://cl.ly/image/2U3l242l350p/Image%202014-12-15%20at%2012.41.06%20PM.png http://cl.ly/image/2U3l242l350p/Image%202014-12-15%20at%2012... "We are all concerned with events in CBD. Fares have increased to encourage more drivers to come online & pick up passengers in the area." Somebody wrote that sentence, and it's a gross one. The same doesn't belong on the Post, it belongs on the person who wrote that and upon the culture that allows for sentences like that to be written.
  - res0nat0r 12y ago
    That doesn't discount the fact that the surge pricing algorithm is still automatic. They don't have people sitting at their evil corporate HQ clicking buttons trying to maximize screwing people over.
    - davidgerard 12y ago
      No, but they knew what they were doing and can't claim they didn't choose to continue.
      - dllthomas 12y ago
        Although it's possible (no idea whether it's the case) they didn't have a mechanism to shut it down, on the time frame they would have needed to.
        davidgerard 12y ago
        We can't philosophically disprove it. But Occam's razor applied to the behavioural evidence suggests Uber thinks surge pricing is fantastic, and keeping it in place during crises is corporate policy unless and until there's a media backlash large enough for it to actually get through their thick skulls that people are pissed off.
danso 12y ago
Whether or not the surge kicked in automatically and the tweet was made merely as an announcement, or the surge was instigated manually...It's surprising that Uber doesn't take advantage of these situations for PR purposes. Would it kill their bottom-line to overpay their drivers for several hours in extreme situations? I guess the problem is that anytime an "extreme" situation happens (which could be any kind of accident or dangerous weather), Uber would then be expected to absorb the costs. That said, maybe Uber shouldn't say anything during emergencies? I mean, what's the usecase here? People in the area are panicking for their lives...their first thought is to check Twitter, then check @Uber_Sydney to see if Uber has anything interesting to say about the terrorist hostage situation? Uber should've made no statement on this, and everyone would've more or less accepted the auto-surge situation. Instead, they not only inserted themselves into a citywide emergency for PR purposes, but then they did something that will never, ever be popular. Would really love to hear the PR strategy that inspired that original tweet by @Uber_Sydney
- deleted 12y ago
  [deleted]
  - rjayatilleka 12y ago
    That snippet would make sense if it was automated. But the front half of Uber's tweet was directly about the situation -meaning they acknowledged terrorists were in the area and then jacked up prices. That's terrible PR. Much better to say the price surge was automatic, and only have no tweet or an automated tweet
    - mikeash 12y ago
      Uber seems to be convinced that surge pricing is a good idea. In a purely rational world, I agree with them. Higher prices means more drivers means more capacity when it's needed. But humans aren't rational, and what sounds good in a dispassionate analysis looks like profiteering in the heat of the moment. They don't seem to really grasp this. It's almost as if the company as a whole suffers from something like autism.
josu 12y ago
If increasing prices will put more drivers on the streets, this means that more people will be able to "escape". It may look bad, but surge pricing may actually help in these situations.
- abandonliberty 12y ago
  That's the Uber argument. It makes logical sense but their customers don't get it. Uber has a reputation problem and failed to generate public goodwill. They're the poster child of arrogant valley companies that everyone loves to hate. As logical as surge pricing is, it will be a hard sell until they win the people over. As a result there was no optimal way for them to respond in this situation. - Disable automated surge pricing, less cars on the street, less people home quickly - Remain silent about automatic surge pricing, guaranteed backlash, more cars on the street Instead they tried to get ahead of the backlash. Maintains their strategy, gets more people home, paints a huge target on their backs for everyone who hates them.
  - mseebach 12y ago
    Haters gonna hate. I think you're arguing from a very narrow perspective, the vast, vast majority of Uber's users wouldn't know a "valley company" if it walked up an introduced it self, much less "love to hate" it. You're right that surge pricing is a counterintuitive concept for many people to accept, and it's a major gamble, but let's not confuse the HN filter bubble with the millions of people who actually use, and keep using, Uber.
    - abandonliberty 12y ago
      I didn't realize that legislators all over the world were part of the HN filter bubble. Or, you know, most journalists. http://reason.com/blog/2014/11/23/forget-ubers-asshole-problem-the-company http://reason.com/blog/2014/11/23/forget-ubers-asshole-probl...
  - vacri 12y ago
    Jacking up prices in response to a humanitarian problem is called 'profiteering'. It is economically sound, but it's not ethical. If they want to show it worked, they should release numbers - proportionately how many uber drivers were 'enticed' back onto the roads? Show people that it actually works, rather than wave hands around saying 'mutter mutter logic mutter mutter save lives'.
AndrewKemendo 12y ago
Seems as though Uber is a great candidate for a real life example of Homo Economicus.
debacle 12y ago
Is Uber really this bad at PR? Don't the investors pay attention to the news cycle? Or is there a witch hunt going on behind the scenes?
- potatolicious 12y ago
  It's possible - and IMO likely - for both to be true. Media outlets are scrutinizing Uber's every move because scandal is popular and everyone wants to break the next Uber story. They are doing this because public opinion for Uber is at a low, mostly due to Uber's own doing and shocking lapses in basic business ethics. Uber got themselves into this mess by behaving deplorably, but one must acknowledge that there's a dogpiling/witchhunt going on as a result.
dreamdu5t 12y ago
How about Uber can charge what they want, and if you don't want to use them then don't. Stop whining. Uber doesn't owe people fucking rides.
- quonn 12y ago
  They can charge what they want, but let's remember that the free market only works if there is complete information. "Whining" in this case is helping to provide full information, so the rest of us can choose which service we pick in the future.
- vacri 12y ago
  Uber can charge what they want, they're free to do so. Other people can say what they like about Uber, they're free to do so. Other people don't owe Uber a kid-glove handling.
deleted 12y ago
[deleted]
closetnerd 12y ago
Is there a way to filter out posts trying to hate on Uber? I think I've gotten the point already.
kesava 12y ago
This is the city of #illridewithyou. There are probably volunteer uber drivers who are willing to help people escape safely during the crisis free of charge. That would have been an awesome PR moment for Uber.
dllthomas 12y ago
It's an interesting case, which raises a few issues. On the surge itself, I think it's a bit instructive to imagine two worlds, call them World 1 and World 2. In World 1, every person has the same ability to pay and attachment to money - their willingness to pay changes only by virtue of how much they need the ride. In World 2, every person needs the ride precisely as much, their willingness to pay is solely due to differences in their financial circumstance. In World 1, the ideal response in every sense would seem to be surge pricing. Those willing to pay a higher price would have their greater need met, at a price they agreed to. Refunding them is fine but arguably unnecessary. In World 2, we're clearly discriminating by class (what you think about that depends on your moral framework; I don't love it) by initially presenting the higher price, whether or not it's refunded. It's interesting to note that refunding in this case is particularly weird - you're giving money back to those who need it least - except when you consider that Uber probably has greater ability to pay than anyone in Sydney... The real world, of course, doesn't resemble either of these. In all cases offering more to drivers is desirable, other things being equal. One thing that I haven't seen discussed is that there could be a distinction between moving people to some minimum safe distance, and moving people beyond that.
lettercarrier 12y ago
Uber is all of us on HN. And we need to speak up that greed is bad. We need to not associate with greed. We need to recognize that this new economy-thing-that's-so-new-we-don't-have-a-name-for-it-yet changes life; And we need to not be on any side that funds, creates, supports, programs, designs and Elephant-in-the-room ignores greed. If the end result of rich people funding new companies makes greed, then I vote to stay poor. There is so much potential with "airborne extensive genetics" to do good. But Uber is greed; greed is bad and toxic.

47 points by unreal37 12y ago

fludlight 12y ago

One man's price gouging is another man's hazard pay.

chris_wot 12y ago
There was no danger in driving someone out of the Sydney CBD.
- fludlight 12y ago
  Demand to leave was abnormally high because of a perceived threat to public safety. Keyword: perceived. Regression to the mean applies to panic as well. With a large enough sample size, all humans, wether they be passengers or drivers are susceptible to fear in the same ways.
- mikeash 12y ago
  It's not the driving out that's problematic, it's the driving in to pick people up. The danger seems to have been way overblown, but that applies to both sides of this particular interaction.

DigitalSea 12y ago

This story really highlights just how far the media witch hunt against Uber has gone. The story basically calls out Uber for its surge pricing strategy which kicked in during a siege in a Sydney, Australia cafe. People in the area were clearing out and catching Uber's. Because of the increased demand, Uber's automatic surge pricing kicked in. This story makes it sound like Uber deliberately turned on surge pricing to capitalise on what was going on, which is not the case. Those who have used Uber before know this is an automatic mechanism, simple supply and demand, which in most cases makes sense. It is just unfortunate that this happened when this hostage crisis was taking place. Surge pricing is and always has been an automatic thing. It isn't something that someone in an Uber office switches on when they notice an increase in demand or a crisis going on they can take advantage of. Uber are a pretty questionable company who have done some rather questionable things, in this situation, Uber did everything right (for the most part). While I understand the fear is real from some of the people fleeing, the people actually being held captive in cafe were the ones we should be focusing on, not the people fleeing who were safe surrounded by. Calling an Uber in a crisis is the last thing I would honestly be doing, I would be calling an actual taxi because I know there are more taxis than Uber's in Sydney. As unfortunate as it might be, the system works for the most part. Obviously there were a lack of vehicles in the vicinity of the siege, the system realised this and compensated by increasing the cost. The alternative in this situation if there was no surge pricing, there would be no additional vehicles to meet the demand which means people have no transport. It is also worth noting the drivers get paid more when surge pricing is in effect, the incentive of more money brings drivers from further away into the area. And you know what, once Uber found out what was happening, they made all rides in the Sydney area free which they didn't have to do. Does this sound the like an action of a company trying to capitalise on a crisis? I don't think so. If Uber didn't reverse surge pricing in the area, then yes, I would be calling them out like everyone else, but as soon as they noticed, they made all rides free and offered refunds to anyone charged surge prices. Anything for a story, right? I think Uber could have handled the PR around this so much better, especially keeping the public in the loop around complexities (if any) of turning off surge pricing or making rides free. I think this also highlights Uber need to consider pricing caps on surge pricing, a 4x increase is just ridiculous crisis or no crisis. I have heard of some parts of the US which have hit a 6x increase before and then Uber intervenes and caps it. A fine piece of shoddy journalism. Shame on you Washington Post and every other media outlet making this into a far bigger issue than it actually is.

cjoh 12y ago
This wasn't an "automatic price increase" unless software got really good at explaining why they were increasing prices. http://cl.ly/image/2U3l242l350p/Image%202014-12-15%20at%2012.41.06%20PM.png http://cl.ly/image/2U3l242l350p/Image%202014-12-15%20at%2012... "We are all concerned with events in CBD. Fares have increased to encourage more drivers to come online & pick up passengers in the area." Somebody wrote that sentence, and it's a gross one. The same doesn't belong on the Post, it belongs on the person who wrote that and upon the culture that allows for sentences like that to be written.
- res0nat0r 12y ago
  That doesn't discount the fact that the surge pricing algorithm is still automatic. They don't have people sitting at their evil corporate HQ clicking buttons trying to maximize screwing people over.
  - davidgerard 12y ago
    No, but they knew what they were doing and can't claim they didn't choose to continue.
    - dllthomas 12y ago
      Although it's possible (no idea whether it's the case) they didn't have a mechanism to shut it down, on the time frame they would have needed to.
      - davidgerard 12y ago
        We can't philosophically disprove it. But Occam's razor applied to the behavioural evidence suggests Uber thinks surge pricing is fantastic, and keeping it in place during crises is corporate policy unless and until there's a media backlash large enough for it to actually get through their thick skulls that people are pissed off.

danso 12y ago

Whether or not the surge kicked in automatically and the tweet was made merely as an announcement, or the surge was instigated manually...It's surprising that Uber doesn't take advantage of these situations for PR purposes. Would it kill their bottom-line to overpay their drivers for several hours in extreme situations? I guess the problem is that anytime an "extreme" situation happens (which could be any kind of accident or dangerous weather), Uber would then be expected to absorb the costs. That said, maybe Uber shouldn't say anything during emergencies? I mean, what's the usecase here? People in the area are panicking for their lives...their first thought is to check Twitter, then check @Uber_Sydney to see if Uber has anything interesting to say about the terrorist hostage situation? Uber should've made no statement on this, and everyone would've more or less accepted the auto-surge situation. Instead, they not only inserted themselves into a citywide emergency for PR purposes, but then they did something that will never, ever be popular. Would really love to hear the PR strategy that inspired that original tweet by @Uber_Sydney

deleted 12y ago
[deleted]
- rjayatilleka 12y ago
  That snippet would make sense if it was automated. But the front half of Uber's tweet was directly about the situation -meaning they acknowledged terrorists were in the area and then jacked up prices. That's terrible PR. Much better to say the price surge was automatic, and only have no tweet or an automated tweet
  - mikeash 12y ago
    Uber seems to be convinced that surge pricing is a good idea. In a purely rational world, I agree with them. Higher prices means more drivers means more capacity when it's needed. But humans aren't rational, and what sounds good in a dispassionate analysis looks like profiteering in the heat of the moment. They don't seem to really grasp this. It's almost as if the company as a whole suffers from something like autism.

josu 12y ago

If increasing prices will put more drivers on the streets, this means that more people will be able to "escape". It may look bad, but surge pricing may actually help in these situations.

abandonliberty 12y ago
That's the Uber argument. It makes logical sense but their customers don't get it. Uber has a reputation problem and failed to generate public goodwill. They're the poster child of arrogant valley companies that everyone loves to hate. As logical as surge pricing is, it will be a hard sell until they win the people over. As a result there was no optimal way for them to respond in this situation. - Disable automated surge pricing, less cars on the street, less people home quickly - Remain silent about automatic surge pricing, guaranteed backlash, more cars on the street Instead they tried to get ahead of the backlash. Maintains their strategy, gets more people home, paints a huge target on their backs for everyone who hates them.
- mseebach 12y ago
  Haters gonna hate. I think you're arguing from a very narrow perspective, the vast, vast majority of Uber's users wouldn't know a "valley company" if it walked up an introduced it self, much less "love to hate" it. You're right that surge pricing is a counterintuitive concept for many people to accept, and it's a major gamble, but let's not confuse the HN filter bubble with the millions of people who actually use, and keep using, Uber.
  - abandonliberty 12y ago
    I didn't realize that legislators all over the world were part of the HN filter bubble. Or, you know, most journalists. http://reason.com/blog/2014/11/23/forget-ubers-asshole-problem-the-company http://reason.com/blog/2014/11/23/forget-ubers-asshole-probl...
- vacri 12y ago
  Jacking up prices in response to a humanitarian problem is called 'profiteering'. It is economically sound, but it's not ethical. If they want to show it worked, they should release numbers - proportionately how many uber drivers were 'enticed' back onto the roads? Show people that it actually works, rather than wave hands around saying 'mutter mutter logic mutter mutter save lives'.

AndrewKemendo 12y ago

Seems as though Uber is a great candidate for a real life example of Homo Economicus.

debacle 12y ago

Is Uber really this bad at PR? Don't the investors pay attention to the news cycle? Or is there a witch hunt going on behind the scenes?

potatolicious 12y ago
It's possible - and IMO likely - for both to be true. Media outlets are scrutinizing Uber's every move because scandal is popular and everyone wants to break the next Uber story. They are doing this because public opinion for Uber is at a low, mostly due to Uber's own doing and shocking lapses in basic business ethics. Uber got themselves into this mess by behaving deplorably, but one must acknowledge that there's a dogpiling/witchhunt going on as a result.

dreamdu5t 12y ago

How about Uber can charge what they want, and if you don't want to use them then don't. Stop whining. Uber doesn't owe people fucking rides.

quonn 12y ago
They can charge what they want, but let's remember that the free market only works if there is complete information. "Whining" in this case is helping to provide full information, so the rest of us can choose which service we pick in the future.
vacri 12y ago
Uber can charge what they want, they're free to do so. Other people can say what they like about Uber, they're free to do so. Other people don't owe Uber a kid-glove handling.

deleted 12y ago

[deleted]

closetnerd 12y ago

Is there a way to filter out posts trying to hate on Uber? I think I've gotten the point already.

kesava 12y ago

This is the city of #illridewithyou. There are probably volunteer uber drivers who are willing to help people escape safely during the crisis free of charge. That would have been an awesome PR moment for Uber.

dllthomas 12y ago

It's an interesting case, which raises a few issues. On the surge itself, I think it's a bit instructive to imagine two worlds, call them World 1 and World 2. In World 1, every person has the same ability to pay and attachment to money - their willingness to pay changes only by virtue of how much they need the ride. In World 2, every person needs the ride precisely as much, their willingness to pay is solely due to differences in their financial circumstance. In World 1, the ideal response in every sense would seem to be surge pricing. Those willing to pay a higher price would have their greater need met, at a price they agreed to. Refunding them is fine but arguably unnecessary. In World 2, we're clearly discriminating by class (what you think about that depends on your moral framework; I don't love it) by initially presenting the higher price, whether or not it's refunded. It's interesting to note that refunding in this case is particularly weird - you're giving money back to those who need it least - except when you consider that Uber probably has greater ability to pay than anyone in Sydney... The real world, of course, doesn't resemble either of these. In all cases offering more to drivers is desirable, other things being equal. One thing that I haven't seen discussed is that there could be a distinction between moving people to some minimum safe distance, and moving people beyond that.

lettercarrier 12y ago

Uber is all of us on HN. And we need to speak up that greed is bad. We need to not associate with greed. We need to recognize that this new economy-thing-that's-so-new-we-don't-have-a-name-for-it-yet changes life; And we need to not be on any side that funds, creates, supports, programs, designs and Elephant-in-the-room ignores greed. If the end result of rich people funding new companies makes greed, then I vote to stay poor. There is so much potential with "airborne extensive genetics" to do good. But Uber is greed; greed is bad and toxic.