With New York City’s public transit system crippled by flooding caused by Hurricane Sandy and taxicabs in high demand, Uber is trying to make itself indispensable transportation for New Yorkers.
Though New Yorkers still have to deal with nightmarish gridlock, Uber, a San Francisco-based startup that lets users request town cars using a smartphone app, has doubled pay for its fleet of livery and black car drivers — while keeping fares constant for customers — in an effort to increase the number of cars picking up passengers.
Uber faced its own nightmare immediately following the storm after high demand caused its “surge pricing” to kick in, doubling fares for riders, as well as pay for drivers, and setting off a round of angry tweets and accusations of price-gouging.
Following the outcry from customers who thought Uber was taking advantage of misfortune, the company said it would reduce fares to normal levels, but would nevertheless double driver pay to get more vehicles on the road.
It worked, according to Uber New York’s general manager Josh Mohrer, who noted the supply of Uber drivers has gone from “far below normal” on Wednesday morning (before the higher fares were in place), to “above the normal range” on Wednesday evening.
“We decided to not pass on the cost to drivers for the time being to help do our part in our city’s recovery,” Mohrer told The Huffington Post in an email. “There are huge losses for the business in doing this, but will continue as long as we can today while we figure out more sustainable ways to keep supply up while the city is in need.”
Mohrer explained that the company adopted its surge pricing system because “increasing the opportunity for our driver partners to earn money results in more drivers coming out.”
In response to a customer query, Uber tweeted on Sunday night that surge pricing would be enabled because the company “want[s] to provide you w/ a reliable service.”
On Wednesday, Uber defended the price hike in response to a critical customers’ tweet, but reversed its stance some 30 minutes later.
There’s no word whether Uber will re-enable its demand-sensitive pricing policy and increase fares again.
The fare flare-up marks Uber’s second New York headache in only a few weeks. Earlier this month, the startup pulled its taxi-hailing app following opposition from the city Taxi and Limousine Commission, which maintained that Uber’s payment system violated its existing contracts with payment processors.
The Huffington Post is eager for insights from our community, especially people with experience in power, infrastructure and engineering, on the adequacy of emergency preparation in advance of Hurricane Sandy, and the degree to which past disasters have informed adequate planning and construction. Please send a note to sandytips@huffingtonpost.com with insights and suggestions for the important questions that need to be asked of relevant private sector and government officials, and point us toward stories that need to be pursued.
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