Those looking to get around New York during the big blizzard that is expected to drop 3 feet of snow on Monday evening can use Uber without having to worry about paying ridiculously-high prices for a ride.
As Bloomberg Businessweek notes, Uber will cap its dynamic pricing model — which jacks up the price of a ride to help encourage more drivers to work when demand is exceeding supply — in NYC during the storm. The governors of New York and New Jersey declared a State of Emergency on Monday morning.
Uber promised limit surge pricing during U.S. emergencies or disasters this past July after it inked a deal with the New York Attorney General, who started an investigation into whether the company’s practices ran afoul of his state’s price gouging law. It also came after Uber users in New York saw surge pricing of more than 8 times Uber’s normal fare during a snowstorm in December 2013. Users complained of similar price increases during Hurricane Sandy in 2012.
Here’s how the cap works: any surge in a region hit by a disaster will be capped below the rate charged on the three days with the highest surge prices in the 60 days leading up to the emergency. In other words, if Uber only charged at most 2.5 times its usual fare in the two months before a weather storm hit, that’s the highest its surge will go.
In a letter to users in New York City, Uber said customers won’t be paying more than 2.8X the usual fare. As part of Uber’s promise to limit surge pricing during disasters, Uber will donate 20 percent of fares with surge pricing to the American Red Cross.
Uber’s surge pricing technique has angered many critics who say the strategy is the equivalent to price gouging. It’s been a controversial topic and most recently came up in Sydney, when Uber was charging customers more than four times the normal rate during the hostage crisis in December before deciding to refund customers and offer free rides following backlash on social media.
Meanwhile, Uber is also trying to patent the act of surge pricing. Here’s the letter that Uber wrote to customers in New York:
A major nor’easter is expected to hit the City tonight bringing heavy snow and blowing wind over the next 2 days. We wanted to provide a quick update about how your Uber rides will be affected by the storm.
Due to the State of Emergency declared in New York City, prices will not exceed 2.8x the normal fare.
This reflects Uber’s national policy developed with New York Attorney General Schneiderman that balances the goal of reliable transportation options with affordability during disasters: Anytime a disaster or state of emergency strikes, dynamic pricing is capped and all Uber proceeds will be donated to the American Red Cross to support relief efforts. On your receipt, you will see a donation from Uber to the American Red Cross.
A few things to be aware of:
- Higher than normal ETAs: Please be patient as demand for rides may be higher and wait times may be longer than usual
- Limited destinations: We have reminded partners of the importance of driving safely in inclement weather – in areas where there is uncleared snow, driver partners may not be able to pick up or drop off riders
- Take caution: Please monitor news sources for the most up-to-date information about the storm and follow federal, state, and local safety directives
Whatever this storm brings, we’ll ride it out together.
Team Uber NYC