Uber

Did Uber Price-Gouge Terrified New Yorkers after Explosion or Just Make Sure They Got Home?

Ride-sharing company stupidly attacked after prices went up in Manhattan area wracked by terroristic violence.

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Wikimeida, fair use

Uber, the ride-sharing app that has revolutionized transportation options across the developed world, utilizes "surge pricing," meaning that prices go up if demand is higher than usual. This happens predictably during rush hour and around a concert and sports venues letting out and less predictably around big weather events, and…violent episodes such as the bomb blast that happened over the weekend in the Chelsea section of New York City.

A number of reports say that prices went up by as much as 1.8 times 80 percent of normal fares in the aftermath of the blast. Cue moral outrage.

Activist and New York Daily News columnist Shaun King, among others, verified the price hikes:

And here's how the U.K.'s Sun wrote up its reporting on the matter:

Sun, screen cap

Let's rewrite that headline to better reflect better basic economics: "Uber increases fares by almost double to incentivize drivers to take terrified New Yorkers home."

People who get flipped out by real-time pricing—and it happens every time there's a big blizzard, traffic jam, or anything else—should also recognize that drivers are people too. All things being equal, they don't want to go out during a snowstorm any more than the rest of us, and they're not keen on picking up fares (or even being on the road) when bombs are exploding. While customers understandably concentrate on fare hikes, it's equally important to realize that drivers need a reason to pull an extra shift, especially in times of danger. That's precisely what surge pricing does, by hiking compensation. This is one reason why every city in America that I know of authorizes emergency rates that typically double normal taxi fares during extreme weather and other events.

In 2014, Uber entered an agreement with New York state's attorney general to cap surge pricing during emergencies. But despite an apparently widely shared misunderstanding to the contrary, that didn't mean it wouldn't use surge pricing during "abnormal disruption[s] of the market," only that it wouldn't jack rates super-sky-high. In fact, Uber has publicly stated that in the Big Apple, emergency fares won't top 2.8 times the regular fare (different cities have different agreements; in Boston, for instance, the multiple is 2.9). Another ride-sharing service, Lyft, says it never raises emergency fares more than 200 percent of regular fares.

The moral apoplexy that always surfaces in situations like this is understandable but totally misguided and founded on ignorance and lack of empathy with the very drivers that so many Uber-haters (such as Hillary Clinton and Bernie Sanders) say are being taken advantage of by the company's heartless inventors. Go figure.

In 2015, Reason's Jim Epstein took a long look at what he called "Uber and the Great Taxicab Collapse." Check it out below or here.

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  1. Not sure, but this is jusst alright by me!
    Speel-kech no werk on hdlines?

    1. Yea, who cares? It’s free market capitalism, supply and demand. I’m sure the taxis wouldn’t have done that and they were busy helping out people by charging them normal prices. I don’t think anyone if forcing people to ride uber.

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  2. So why didn’t said New Yorkers just get a cab?

    Oh…

    1. Everyone knows that Union member lives are worth more than the normal kind of lives, so no one’s going to critique the Cab’s that likely cost 1.5x to 2x the cost. Uber’s mistake is apparently not charging outrages prices all the time.

  3. Some people just don’t get economics. That whole supply and demand thing is just so damn complicated.

    1. And totally unfair

  4. Just don’t do it uber. Don’t surge, and let Shawn King’s family wait an hour.

    1. When prices rise to reflect demand, it’s price gouging.

      When prices hold steady and demand affects supply, causing them to wait, it’s racism.

      You can’t win with these people.

      1. I signed up to drive Uber a few weeks ago

        So far I’ve tried it for 3 nights (around 12 hours total) and averaged about $12 (maybe a touch higher but certainly no higher than $15) an hour after subtracting gas and my own estimation of maintenance cost.

        Since the take-home is a bit too low for me, I haven’t done it since August. I still turn the app (it’s a special ‘Uber Partner’ app) on weekends to check, but I wouldn’t bother driving it unless there’s a price surge.

        1. The problem with you is that you aren’t worth $15/hr. The market will bear what it will, I guess. Stop complaining about Uber-God– you aren’t helping free-markets.

          1. He is worth more than $15/hour. That is his point. You are an idiot. That’s my point.

            1. Even though his post and personality are both irritating, he isn’t wrong about the market setting the wage. Apparently even a stopped socialist can be right twice a day.

              That being said, Uber (and driving small passenger vehicles) is something most people do every day so it’s not going to be a job that pays a whole hell of a lot. Driving for Uber/Lyft is actually less complicated than being a Pizza Delivery driver, for example, so it’s hardly surprising that it pays about the same. (Although I can’t say where Democrat lives, it could vary by a lot.)

              That being said, if you’re going to drive for one of these companies, drive for Lyft. You can get/receive tips through credit cards which is a massive failing of Uber in my humble opinion. I took Uber once, and when I couldn’t tip through their application I decided not to use them again since I don’t usually carry a lot of cash but I also like to tip well when appropriate.

              1. He isn’t wrong about that – but that was completely accidental.

                He was wrong about the main points of his little rant – the OP isn’t *mad* about anything, the OP considers his time worth more than $12 which is why he does something else instead of drive Uber, and the OP would consider making himself available during surge pricing – *which is the point of surge pricing in the first place*!

          2. I realize this was supposed to be a parody of a libertarian talking to a fast food worker, but it’s not a good parody because IWasADemocrat just moved onto doing literally anything else more worthwhile instead of forming a coalition to buy some guys with guns to shut down Uber if they don’t pay him what he’s worth.

            1. instead of forming a coalition to buy some guys with guns

              AmSoc doesn’t go to your house and complain about your hobbies.

          3. Yep.

            This implies that Uber is succeeding with drivers that consider $12-15/hr to be the best option for their time, but without people like IWasADemocrat, who have something better to do.

            So, we should fuck that up by jacking up Uber prices and payouts artificially, so that people who already have something better to do will switch over. And everyone gets to pay more for their rides. And buy rides less. And some of those people who were happy to get $12-15/hr won’t be needed, and can go fall back to whatever their next best option was (maybe $8-10/hr?)

            That’s called “rational resource allocation” and “helping people.”

        2. You get paid?
          I thought it was “ride sharing”?
          When you drop off a customer, doesn’t he say “Thanks, now I owe you a ride.”?
          Uber isn’t anymore ride sharing than a grocery store is “food sharing”.

          1. “When you drop off a customer, doesn’t he say “Thanks, now I owe you a ride.”?”

            Sure, he gives you money as an IOU. Then when you need a ride from him, you can pay him with that money.

            1. Exactly. Just like every other transaction. There’s no “sharing “.
              You proved my point.

  5. People are complaining about a 1.8X fare? That actually sounds pretty average for the city on a weeknight. I’m sure it was even higher when the cars closed. That shit can hit like 4X.

    1. when the bars closed**

  6. You know what? At least Uber has SOME kind of reaction to what’s going on. Unlike our so-called “president”.

  7. Activist and New York Daily News columnist Shaun King, among others, verified the price hikes:

    Et tu, Gillespie?

    Christ.

    1. That bozo should have stuck to snowboarding. He was actually really good at it. Activism and column-writing — not so much.

    2. Did I miss something?

      1. Shaun King, the melodramatic fraud who built his career on lying about being black. Rico, of course, quotes him repeatedly.

        Trustworthy cite, or most trustworthy cite ever?

        1. Oh, you’re upset that he was quoted. I thought there was an issue with something Nick printed.

          Carry on.

        2. Professional liars have to stick together.

        3. I don’t understand why it’s necessary to cite Shaun King, either. Every mention of him legitimizes him in someway.

          I am disappointed in Billy Corben and would prefer that he would stick to making interesting documentaries about Miami and cocaine, or Miami and football.

          1. Exactly – why give this fraud any legitimacy? He’s a con man.

  8. That’s the trouble with technology, isn’t it? It’s just too fair.

    There was an increase in demand without an increase in supply, so of course prices went up regardless what the causes were. Of course why should the reason behind supply-demand change matter? There was 1 fact: supply-demand dynamic changed.

    It just comes back to the fundamental fact: People do not like fairness

    1. To give people the benefit of the doubt: when people who are harder workers/more fortunate/more willing to part with their resources/luckier in life get preferential treatment, it often feels unfair to those who cannot afford or choose not to pay for that preferential treatment.

      Supply and demand is just the way it is, and it works, but pretending that the psychology doesn’t work that way won’t get you anywhere.

  9. er – fare’s can double during the rush after the bars close. Or during rush hour.

    I wouldn’t expect anything less with a bunch of people trying to get the hell out of Dodge

  10. You’d think Shaun King would appreciate uber since a cab won’t pick up a brother like him.

  11. The standard taxi fares are about equal to the Uber surge prices. Recently took a taxi from Boston airport to Cambridge, then Uber’d back the same route. The taxi cost twice as much as the Uber ride, and the Uber ride was much more pleasant.

  12. While customers understandably concentrate on fare hikes, it’s equally important to realize that drivers need a reason to pull an extra shift, especially in times of danger.

    I thought that “progressives” believe that workers should get overtime for pulling extra shifts. Why is this different?

    1. Force wasn’t involved

    2. Once again lefties display that they don’t know where money comes from. pay higher wages now! Whaddya mean prices are being raised?!

      1. Take it out of the CEO’s paycheck!!!!

        What do you mean the CEO’s paycheck is only 0.01% of operating expenses and cutting it would not impact prices in any way? You corporate shill!

    3. I’m sure your standard issue progressive could explain to you exactly why Uber’s owners should subsidize drivers to give drunk hipsters rides home at bar close.

    4. Why is this different?

      Probably because the lefty activist types didn’t get their cut (through political contributions like the cab companies pay).

  13. 1.8 surge price? That’s called the weekend fucktards.

    And I thought the “event” was no big deal. People were just chillin’ eating gelato and shit.

  14. Something something supply and demand…

  15. Well at least the terrorist attack kind of merited it’s own article.

  16. New Yorkers are all tough guys and shit.

    1. Yeah, you know, apologies to any New Yorkers here but it seems like people from NYC are always doing two things: bragging about how badass New Yorkers are, and crying for the authorities to come and save them from something.

  17. New Yorker who just paid $10 for a cup of coffee outraged ge had to pay $20 to escape a possible life threaning situation.

    1. New Yorker who pays $450 for a 40 ft2 (yeah, not a typo – forty square feet) upset about high transport costs.

  18. Wait! The press in the UK is outraged? Well, who really cares?
    On the other hand, I would love to see the screen shot that says “due to market demands requiring a fare hike, we have suspended all Uber services until the demand returns to normal. This is to maintain the cheaper than taxi rates you leeches have come to expect, and to assure the safety of our (non-employee) drivers. Now walk home, because New York has many, many gun restrictions that make it very safe.”

    1. Alas, we don’t have nearly enough people rich and bold enough to sacrifice their company’s goodwill to teach people economics lessons.

  19. Idiots. That’s all there is to say.

  20. “Uber increases fares by almost double to incentivize drivers to take terrified New Yorkers home.”

    Or, let’s try this – “Uber surge-pricing algorythm responds to a detected surge in use and doesn’t and can’t know *why* that surge happened’.

  21. There’s no need to switch over to the self-driving Uber robot cars. The existing ones are already cold and emotionless enough.

  22. Maybe ?ber charged more because there was a person, or person’s going around with explosives and no one knew who they were.

  23. Virtually every time I see a low Uber rating it is driven by a comment by a rider that got caught up in a price surge because they chose to attend an event that created high demand when the event got out. Many people just don’t understand how supply/demand works in high variance markets. The amount of price bumps they complained about were in line with the price surges that happened in Chelsea (1.5-2X). Looks like the algorithm was working within demand parameters with no support that Uber was “capitalizing” on the event anymore than it would have had there been transportation shortages for some other reason.

  24. Someone planted a bomb with the intent of harming and terrorizing civilians. So far, social media has chosen to chide me for being so myopic (“You know, people in other countries have to deal with a lot worse than this!”) as to be outraged over this. Or, as in this article, the outrage should come not from the fact that bombs were planted, but that Uber charged “too much”. Fuck, what does it take to get Americans to actually get angry about the fact that Americans were targeted in a terrorist attack? Are we going to have to start a rumor that the bombers were also against gay marriage, thought Brock Turner really got a raw deal, and culturally appropriated their choice of dashboard decor just to get people actually concerned about the main goddamned issue?

    1. Terrorism is the new normal.

      More bombs were found in New Jersey? Meh.

    2. What is ‘getting angry’ going to do? Will it be the final impetus needed for us to ‘take the fight to the enemy’? Is that not what we’ve supposedly been doing for the last decade and a half? What happened to ‘we have to fight them over there so that we don’t have to fight them over here’? Is that not half the justification for the Iraq Invasions and occupation? Is that not the primary justification for Afghanistan, Libya, Syria, etc?

      Or is this supposed to be the trigger that finally gets Americans supporting a wall? A moratorium on Muslim immigration (which effectively means ending immigration from Africa, the whole Middle East (even of Chaldeans fleeing persecution, SE Asia, etc)? Internal passports? Mandatory ID? Wholesale state surveillance? Warrantless searches? Travel restrictions? Secret lists?

      What, exactly, will getting angry about ‘being targeted’ do that we aren’t already doing?

      1. Nothing, we should do nothing. If the terrorists blow us up and we just hose the sidewalks off then they lose or something.

        1. If invading and occupying 2 countries, creating an all-encompassing surveillance state, bombing dozens of countries, arming terrorists in the Middle East, and turning every podunk police department into Delta Force wannabes all count as nothing, then I’d hate to see what you think counts as something.

      2. It will lead to doing something, which is better than nothing.

        1. It really depends on what that something is, doesn’t it?

  25. It’s like nobody has ever flown in an airplane or rented a hotel room before. It works the same way, idiots.

    1. But its never before been *transparent* to the consumer. Even though everyone knows going to a hot vacation spot during peak vacation times is more expensive than going off season. They just didnt know that businesses did that and now Uber is rubbing their faces in a standard business practice. Demand goes up, price goes up until supply increases, then price goes back down.

  26. Shaun King’s tweet says ‘many of our train lines were closed.’ Shouldn’t they be pissed at the city for leaving scared New Yorkers stranded?

    1. nah man, see – the government eschews profit. They closed the train stations *for safety* while Uber, the horrible money-grubbers they are, tried to coerce more drivers to risk themselves so that Uber could make more money.

      They can’t win.

  27. So, Uber was supposed to, what, dragoon people into driving? Can these idiots not comprehend that voluntarily picking up fares via a private service from time to time is not the same thing as being a full-time government employee?

  28. RE: Did Uber Price-Gouge Terrified New Yorkers after Explosion or Just Make Sure They Got Home?
    Ride-sharing company stupidly attacked after prices went up in Manhattan area wracked by terroristic violence.

    Actually, this is a great idea.
    Eliminating any capitalist enterprise so people will stay on Uncle Sam’s plantation should taken when the opportunity arises, and using terrorism as a precept only puts the cherry on top of the cake.

  29. Uber’s pricing fluctuates automatically based on demand. It goes up when there are subway closures. It goes up when it rains. It goes up during rush-hour. Uber’s algorithms don’t know why there is a demand surge, they just price accordingly.

    The surge in pricing allows customers who are willing to pay more to get immediate service at times of day when it’s difficult to hail a cab. It also entices Uber drivers, who are self-employed contractors, to go out and take fares when there is a surge, thus alleviating the excess demand.

    Before there was Uber, during periods when there was a “surge” in demand for cabs, it was just really hard to get a cab, and you had to stand on the corner waving your arm for half an hour. So this seems like a nonsense cause for outrage.

  30. Uber didn’t price gouge because there is no such thing as price gouging.

    Just like how GA’s governor is warning gas stations not to price gouge. Well guess what Governor? If gas stations keep prices low, then people will fill up their gas tanks as much as possible. If gas station inflate their prices, then people may only buy what is absolutely necessary. Gas station operators have a fucking business to run. Their bills don’t stop when the gas stops.

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  32. the sad part about economics and politics generally is that if the idiots who don’t understand why prices increase in these situations actually got their way -the economy was run how they wanted, etc.- they would be horrified at what they brought upon themselves. but in the hypothetical, they can think the grass would be greener if only we weren’t a greedy, morally corrupt society.

    1. Horrified at what they brought upon themselves? It’s kind of cute if you actually believe they’re capable of that kind of learning and self-reflection. It’s far more likely the idiots would just find some scapegoats to blame for being greedy and morally corrupt. Just look at Venezuela. Years of centrally-planned looting have wrecked the economy to the point they’re out of toilet paper, but you’ll neer hear the leadership say, “Hm, maybe this ‘socialism’ isn’t quite working out, we should try something else.” No, they just keep blaming those greedy capitalists for sabotaging their wise and benevolent plans. Their disconnect from reality is at a very deep level.

  33. Go figure, outside of something like a football game letting out or a bunch of flights landing at once, it’s not normal for there to be a very large number of people simultaneously trying to get away from a single point (in any direction possible) while simultaneously pretty much nobody is trying to go toward that point.

    I remember when that bombing happened in Australia and people were acting like someone at Uber was sitting there reading the news and made an active decision to push the “huge fucking surge multiplier” button to capitalize on the event. But no, as I just said, the mass exodus from that single point isn’t normal and the surge algorithm simply picked up that there was an an extremely unusually large demand to get a ride in the vicinity of the blast. Meanwhile Uber later did fare adjustments for everyone who paid the extremely high surge.

    And of course, as touched on in the article, too many people fail to understand that if the rates were held to normal then the drivers may not be willing to take the risk to go toward the apparent danger zone and then you still wouldn’t be able to get a ride. Given the PR shitstorm that happens every time one of these things happens though Uber should probably give the drivers a big surge, show a lower surge to passengers (you do need SOME amount of pricing-induced rationing), and eat the difference.

    1. And finally, the other thing that I think a lot of people miss is that most of the time, if Uber and Lyft are both surging off the charts (I find that sometimes you can have a really high surge on Uber but Lyft is normal, or vice-versa), then you’re most likely not getting a regular taxi. People fail to distinguish between “in principle, I could maybe get a taxi that doesn’t have surge pricing” and “in actuality, how likely am I to actually get a regular taxi in a reasonable amount of time given the current circumstances?”

  34. They’ll still be complaining about prices when there’s no transportation at any price. What does it take to teach someone basic economics?

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  37. Look at the recent gas pipeline leak in Alabama and how it affects the southeast. Georgia declared a state of emergency and enacted price-gouging controls. Their prices went up 25 cents a gallon. In Alabama, the governor relaxed regulations on gas truckers (specifically, how long they could stay on the road). Gas prices in Alabama only went up about 7 cents.

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