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All eyes are on New York, where along with a massive incoming storm, Uber is rolling out its emergency surge pricing cap. On Monday, there was a flurry of coverage by media outlets from Bloomberg to Time, with some saying this marks, “a chance for Uber Technologies Inc. to show it has learned from past mistakes.”
But this isn’t the first time Uber has capped surge pricing during a state of emergency — it’s the second.
According to a source familiar with the testing, Uber used its new surge price capping system in October during Hurricane Ana in Hawaii, which appears to have gone unreported by media. The company didn’t make a fuss of the development, choosing to introduce the system without scrutiny. Although Hawaii declared a state of emergency during that time, Hurricane Ana didn’t cause much damage.
Here’s how Uber calculates surge pricing in states of emergency: It chooses the fourth highest surge rate in the 60 days prior and makes that the capped rate for the storm. The top three highest surge rates from the prior two months will be ignored, in hopes of keeping the fare reasonable. It’s not clear why Uber won’t just cap surge at a designated amount, like 2x. The company will donate all of its revenue, which is 20 percent of each ride, to the American Red Cross during this time.
Uber announced the new emergency surge pricing policy in July, in light of tropical storm Arthur, which hit the East Coast. But according to an SF Examiner story, the pricing cap never went into effect because a state of emergency was never declared during the storm. Hawaii’s Hurricane Ana was its first test in October, but the New York blizzard will be its biggest.
The capped fare for New York’s upcoming blizzard Juno comes after the state’s attorney general penned a New York Times op-ed shaming Uber for what he called “price gouging” in the wake of surge pricing during Hurricane Sandy. The blowback for Uber surge pricing during times of crises stretch across the globe, with the recent outcry notably occurring after a hostage situation in Sydney. During instances like these, Uber has initially repeated the company line about how surge pricing gets more drivers on the road during times they might not otherwise drive.
This is true, but it doesn’t subvert the ethical quandary of leaving those who can’t afford the surge pricing in a potentially dangerous situation. The reoccurring outcry appears to have prompted Uber to have a change of heart.