Uber Ends Price Gouging During Severe Weather, Natural Disasters

By Katy Galimberti, AccuWeather.com Staff Writer
August 13, 2014; 10:30 AM ET
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As Uber, the trendy company that combines technology with transportation, grows across the United States, the company made alterations to price policies after gouging wallets of those needing a ride home in severe weather.

Uber is a technology platform that connects drivers to those in need of a ride. The company is known for its mobile application feasibility as users can simply tap their phone a few times and schedule a "taxi" ride in over 70 cities across the country.

Being a private company, rates are not tied down to government regulations. Uber hiked prices in New York City during Superstorm Sandy in the fall of 2012 and other severe storms and weather incidents.

Known as surge pricing, the company faced heat as some riders reported cab fares nearly eight times the normal rate. Uber was also known to boost fares during major holidays when traffic levels are high.

Hurricane Sandy left areas of New York City flooded and forms of public transportation were shut down leaving Uber the ability to drive up prices during the damaging storm. (Flickr/Jason Howie)

However, the New York state government worked with the company to put an end to the fluctuating fare levels during severe weather events. Attorney General Eric T. Schneiderman announced on July 8, 2014, that in agreement with Uber, fare prices would be capped during "abnormal disruptions of the market" such as natural disasters or intense storms.

Uber, in turn, applied the regulations to all locations in the United States. In a press release, Uber said it will cap the price flux limited to the normal range of prices it charged in the preceding 60 days.

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Attorney General Schneiderman said the policy "provides Uber with clarity from government about how the law will be applied to its innovative pricing model."

On the same day, Uber announced a partnership with American Red Cross in an effort to aid relief efforts during natural disasters.

During periods of elevated price levels, Uber will donate 20 percent of the total fare to the Red Cross. In addition, Uber will provide transportation for Red Cross workers.


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