Uber blizzard surge pricing: Caps are in effect where there is a state of emergency.

Uber Will Cap Surge Pricing in East Coast Cities During the Worst of the Blizzard

Uber Will Cap Surge Pricing in East Coast Cities During the Worst of the Blizzard

Moneybox
A blog about business and economics.
Jan. 26 2015 2:24 PM

Uber Will Cap Surge Pricing in East Coast Cities During the Worst of the Blizzard

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Get ready.

Photo by John Moore/Getty Images

As snow slams New York City, normally volatile Uber fares won’t surge more than 2.8 times higher than normal.

Uber emailed New Yorkers on Monday to inform them that, per a policy the company rolled out in mid-2014, surge pricing will remain capped as long as a state of emergency lasts. Back in July, when snow was a far-off concern, Uber announced that it had reached an agreement with New York State Attorney General Eric Schneiderman to put a ceiling on surge pricing during state-declared emergencies. The change was made so that Uber would comply with a law New York passed in the winter of 1978–79 to protect consumers from price gouging during an “abnormal disruption of the market” caused by “extraordinary adverse circumstances”:

For purposes of this section, the phrase "abnormal disruption of the market" shall mean any change in the market, whether actual or imminently threatened, resulting from stress of weather, convulsion of nature, failure or shortage of electric power or other source of energy, strike, civil disorder, war, military action, national or local emergency, or other cause of an abnormal disruption of the market which results in the declaration of a state of emergency by the governor.
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Under Uber’s now-national policy, price surging is capped during disasters and states of emergency at the fourth-highest nonemergency surge seen in the previous two months. Uber has also agreed to donate the 20 percent commission it takes on any trip with a surge price to the American Red Cross. Lyft, arguably Uber’s biggest competitor, alerted its New York City users that “Prime Time” pricing (its surge equivalent) would not exceed 200 percent of normal prices. Gett, another on-demand ride company that is currently offering rides in central Manhattan for a flat rate of $10, said its promotion will remain in effect throughout the storm. In a press conference earlier this afternoon, Mayor Bill de Blasio reminded New Yorkers that price gouging during emergencies is illegal and encouraged them to alert the city by calling 311 if they spotted it.

Governors have currently declared states of emergency in New York, New Jersey, Connecticut, and Massachusetts. Uber said surges in Boston will be capped at 2.9 times the normal fare and in New York, New Jersey, and Connecticut at 2.8 times the normal fare. It is possible for different cities within the same state to have different surge caps, though in this case that hasn't happened yet. Uber is alerting riders to storm-imposed surge caps on a city-by-city basis.

And while surge pricing is always controversial—especially in times of crisis—it's worth remembering that increasing the payout for drivers encourages people to stay on the road and makes it more likely you’ll still get a ride as conditions worsen.

Alison Griswold is a Slate staff writer covering business and economics.