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...
As per the line of thinking that article has. Nobody is working as hard, has worked or will ever work as hard as you do. There fore your problems are vastly bigger and demanding than everybody else. Given this the world around you automatically is obligated to help you endlessly fight your daily battles.
A part of which is that a cab driver(who probably by any means of measure is having it difficult than you) must not just report to his duty during hurricane but also should offer it at a everyday price. Now think of this, even if the cab driver had asked for the everyday price these people would have cursed them for not offering the service for free during a hurricane.
Similar story - last year, Olympia WA had a large snowstorm, upwards of 3-4' in 12-24 hours (which would be bad enough in most places, let alone a city without the infrastructure), and a state of emergency was declared (I'm a firefighter - had to go in and ended up working for several days straight).
My girlfriend is a nanny for two attorneys who work for the state. Their offices were closed due to the storm, and to quote the recorded message, "due to the extremely hazardous road conditions, we are closing so employees do not have to attempt the drive to work, and indeed we urge them to stay off the road".
My girlfriend's employers? "So, we'll be working from home - we were told it was too dangerous to go in due to the state of emergency, so we'll need you to be here (a 5 mile drive through mostly non-thoroughfare streets) an hour earlier to keep the (two) kids out of our hair."
Talk about a cognitive disconnect.
It's amazing the attitude even people who would swear blind, and believe, that they don't, have towards those they see as "the help".
Imagine a hacker news post that says, "Über isn't picking me up to take me to safety." Neither headlines are enjoyable but higher prices are better than, Über is putting my safety at risk by missing their target times.
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.
In a city like NY, less than half the population owns an automobile , yet more than that proportion rely on transit systems . I can't find a lot of recent data, but a 1999 study puts the price elasticity of demand for taxi fares at -0.22 . Not surprisingly, that's very close to gasoline.
Based on that, I suspect that the demand for transit will not reduce because Uber double's their prices. Fewer people may be able to afford it, but with the transit systems down, they will have no alternative. This means that people will stop doing whatever is on the other side of that transport. In many cases, that's their job. When people stop doing their jobs, the economy shrinks. With a population the size of NY, that's not good for anyone.
1 - http://economics.about.com/od/priceelasticityofdemand/a/gaso...
2 - http://www.streetsblog.org/2011/04/06/new-yorks-car-ownershi...
3 - http://www.streetsblog.org/2010/12/21/census-data-show-more-...
4 - http://www.vtpi.org/tdm/tdm11.htm
Okay, I'll bite: how? What level of Uber price gouging will, for example, cause an unflooded subway to be constructed within the next few weeks? Maybe quadruple pricing would do it?
The purpose of increasing the fare, is to motivate the driver to drive during the time of a hurricane. This has nothing to do with other things and was never meant to be.
There is a shortage in supply, the demand automatically increases. The only way he can prioritize his work is by offering his services to the highest bidder. He is in business earning just like us. He didn't take a oath to serve selflessly regardless of his own problems.
When the programmer salaries go high because of the demand, do you willingly take a pay cut? Why then do we apply different standards to other professions?
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.
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!
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.
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.
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.
However, here in Michigan after 9/11 (a place not directly affected by the disaster), gas prices shot up drastically, immediately. The governor stepped in and set gas prices at a controlled rate, with serious repercussions if the price limit was breached. That's an example of bad price gouging, in an area where that type of activity should be controlled. There was no immediate threat to Michigan's gas supply, nor to the Michigan transportation network. Prices were not going up as a result of increased risk in the market, but because companies knew they could incite a buying panic at a hugely inflated profit margin. They knew that when their supplies of highly profitable gas ran out, they could get more at the normal rate, then sell it massively inflated again.
What Uber is doing while operating in NYC right now is an example of increased risk. NYC is in a disaster zone. There is a massively increased risk to operating a business on the streets of New York currently. With the public transport out, they need more drivers. Depending on the area, they might need drivers willing to take the risk of operating on these streets. There is a risk to the continuity of their business, a need to fill demand with limited supply. Increasing prices temporarily makes sense. It's the tradeoff between everyone can afford it but no one can buy it versus some can afford it but all who can will be able to buy it.
If the government wants to limit the ability of the market to assess risk, maybe they should compensate Uber and other hire-car companies (aka cabs) to help offset the supply vs demand equation.
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.
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.
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.
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.
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.
Is that your alternative?
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.
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?
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.
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.
While you may think there is "nothing evil" about it, a great deal of the population and, generally, the NY Legislature, disagree.
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.
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.
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.
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.
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.
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.
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
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.
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?
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...).
But in the wake of Sandy, this pricing comes across as far more unscrupulous. I'd guess they didn't consider it.
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.
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 :)
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.
They are now paying the drivers 2X but only charging the rider the normal price...
See also: http://www.slate.com/articles/business/moneybox/2012/06/taxi...
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).
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.