US: Uber plans to limit price surge during East Coast blizzard image

The United States is being currently hit by what has been described as a “life-threatening” storm, with forecasted snowdrops of up to two feet of snow in the New York to Boston areas.

Now, the approaching crisis is a chance for Uber Technologies Inc. – the world’s largest car-sharing service provider – to show it has learned the lessons of previous situations. The company has been on numerous occasions criticized for exploiting crises for profit, including Hurricane Sandy, which hit the East Coast back in 2012, because it has the possibility to increase prices to astronomical figures when demand is higher than available car-rides. Now, after reaching a deal with New York’s attorney general last year, Uber will put a cap on price of fares to no more than 2.8 times the normal rate – for the company’s mobile application that allows people to call for rides using their smartphones. According to a statement issued by the San Francisco-based company, “dynamic pricing will be capped” and “prices will not exceed 2.8x the normal fare,” while all Uber proceeds during the winter storm would also be donated to the American Red Cross to support upcoming relief efforts.

Other competitors, such as Lyft, also said they would have their ride-sharing app’s service limited – while ride-sharing app battles massive snowfall since Monday morning. New York Governor Andrew Cuomo has already imposed a state of emergency, with New York City’s subway limited and the MetroNorth and Long Island Rail Road closed during the night. According to Uber, the company uses a simple supply and demand surge-pricing algorithm – also looking now to patent the technology. Useres were outraged by the latest instances when prices soared massively – such as December’s San Francisco Bay Area’s “Stormageddon” or the hostage crisis in Sydney, Australia.

Via Bloomberg