After hammering out an agreement with New York Attorney General Eric Schneiderman to cap surge pricing during emergencies and natural disasters, ride-hailing app Uber said it will apply those limits nationwide.
The new pricing policy doesn’t mean that Uber won’t use so-called “dynamic pricing” to determine what your ride will cost, but it does mean that the company can’t wildly inflate prices during storms and other “abnormal disruptions of the market,” Schneiderman’s office said in a Tuesday statement.
The new pricing will “always stay below that of the three highest-priced, non-emergency days of the preceding two months,” the company said in a Tuesday blog post. Oh, algorithms, what tangled webs you weave. Basically, Uber has to keep emergency pricing in line with “normal” surge pricing or risk incurring the wrath of Schneiderman, who has aggressively pursued “disruptive” tech companies like Uber and Airbnb for breaking New York law. The state prohibits businesses from price gouging when it comes to weather, disaster, energy source failure, strike, war, or some other declared emergency.
Schneiderman threatened Uber with legal action if the company continued to inflate prices during New York snowstorms, as the company did several times last winter. Rides of a few miles ended up costing hundreds of dollars. Uber didn’t back away from surge pricing, which the company says it needs to ensure that there is enough supply to meet high demand, but did roll out surge-pricing push notifications to make users more aware of price changes.
Uber couched the surge-pricing cap as a community service effort, part of a larger partnership with the American Red Cross where the company will donate its commissions from surge-priced trips during emergencies (which equals about 20 percent of a high-priced fare) to the nonprofit.
“This policy intends to strike the careful balance between the goal of transportation availability with community expectations of affordability during disasters,” Uber CEO Travis Kalanick said in a joint statement with Schneiderman’s office. “Our collaborative solution with Attorney General Schneiderman is a model for technology companies and regulators in local, state, and federal government.”
This story, "Uber won’t surge-price you too much in emergencies" was originally published by TechHive.