
Uber Increases Fares 2x in NYC - Dramatize
http://pandodaily.com/2012/10/31/assholes-shrug/
======
nostromo
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...

~~~
mikescar
Some other posters have mentioned that you can't raise rates in the time of an
emergency. I don't know how valid this is, or what constitutes an emergency.

Irrespective of the majority of cab money going to the corporate apparatus and
not the drivers in plenty of cases, it still seems unfair to expect drivers
not to raise their rates somehow just for the increased danger.

~~~
nostromo
What is legal and what is ethical are two different questions. I was only
speaking about what's ethical (in my view).

------
danielamitay
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
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!

~~~
cdrxndr
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.

~~~
arkem
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?

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

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.

------
ljd
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>

~~~
jellicle
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
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.

------
ericmason
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
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?

------
jauer
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.

~~~
46Bit
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
I would like to hear more about this rich/poor divide and how Uber takes us
there?

~~~
frankus
I don't entirely agree with the reasoning, but I think it goes like this:

Historically transportation in NYC has been pretty egalitarian (leaving aside
car service). A 1-percenter pays the same cab fare, subway fare, or (heaven
forfend) bus fare as a single mom on welfare, and presumably gets basically
the same level of service. The president drinks the same Coke you and I do.

Uber basically allows those with more money to jump the queue. You hear the
same thing about medical services in single-payer or socialized systems, where
it's seen as almost a form of bribery for a medical professional to expedite
care for someone who pays extra.

Unfortunately while markets are arguably fair for groups of people with the
roughly the same level of resources at their disposal (people are just
expressing their preferences by allocating their money differently), they can
be very "unfair" (for a certain narrow meaning of the word) because some
people have vastly more resources to trade for a limited good.

It almost makes you wish you could somehow separate "spendable money" from
"earnable money", but unfortunately you need a way to incentivize people to
work and be productive, and giving them more spending money seems to be the
most straightforward way of doing so.

~~~
pbiggar
Right. I guess the flaw in the argument is that the poor already cannot afford
taxis, and they take the bus.

------
jasonlingx
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.

------
pyoung
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/sand...](http://www.slate.com/articles/business/moneybox/2012/10/sandy_price_gouging_anti_gouging_laws_make_natural_disasters_worse.html)

------
Skywing
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_

------
mikeland86
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.

------
ck2
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>

~~~
yin
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.

------
nedwin
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
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.

------
baddox
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.

------
kapilkale
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-
leas...](http://techcrunch.com/2012/08/19/uber-screwed-me-but-at-least-it-
bought-me-breakfast/)).

But in the wake of Sandy, this pricing comes across as far more unscrupulous.
I'd guess they didn't consider it.

------
brownbat
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
NY price gouging law:

<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
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
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
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>

------
SqMafia
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
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...](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)

------
mlchild
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
>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!

------
samarudge
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?

------
colmvp
Damn you Airbnb! You should learn from Uber raise your rates!

[http://blog.airbnb.com/waiving-fees-for-hurricane-
sandyaffec...](http://blog.airbnb.com/waiving-fees-for-hurricane-
sandyaffected-area)

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

