The company has come under heavy criticism for its “surge pricing” during other crises. In December, Uber caused outrage when it quadrupled prices in Sydney close to the site of a deadly hostage siege in the city centre.
Uber also has a history of astronomic price hikes in New York when foul weather causes spikes in demand. Last December, Uber hit the headlines in New York when Jessica Seinfeld – the cookbook-author wife of comedian Jerry Seinfeld – posted a picture to Instagram, since removed, of the $415 bill she received after dropping her children off at two events. “UBER charge, during a snowstorm (to drop one at Bar Mitzvah and one child at a sleepover.) #OMG #neverforget #neveragain #real,” she wrote.
Uber’s decision to cap prices comes after the city’s top lawmaker warned Uber and other services against price gouging during the storm. “My office will be vigilant in monitoring potential price gouging before, during and after this potentially historic storm,” said New York attorney general Schneiderman. “I encourage consumers to report any businesses that may be capitalizing on the snowstorm to distort their prices. Emergency weather events are no excuse for dishonest and illegal business practices.”
Schneiderman’s warning came as the National Weather Service forecast a potentially historic blizzard in the greater New York City metropolitan area with up to 2ft of snow and wind gusts in excess of 50mph. At least 28 million people across seven states may be affected by the storm.
New York’s price gouging laws ban service providers such as car services, plumbers or businesses selling food, water or shelter from charging an “unconscionably excessive price” during “abnormal disruption of the market”.
Last summer, Schneiderman reached an agreement with Uber to limit prices during a crisis. Uber must limit prices to the normal range it charged in the preceding 60 days – excluding from the cap the three highest prices charged on different days during that period.
As the storm closed in on the city, Uber was charging 1.6 times normal fares for those looking to escape.
This article was written by Dominic Rushe, for theguardian.com on Monday 26th January 2015 21.06 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010