New Yorkers will no longer have to worry about price gouging during emergencies. State Attorney General Eric Schneiderman announced that Uber will now be complying with a state law (enacted in 1978) banning price gouging in times of need. While this particular matter is focused solely on the New York area, Schneiderman said in his statement that Uber will be adopting this policy nationwide (although no date was given).
Uber’s CEO and founder, Travis Kalanick, is happy to have the ride sharing company be part of the initiative.
“This policy intends to strike the careful balance between the goal of transportation availability with community expectations of affordability during disasters,” Kalanick said in a statement. “Our collaborative solution with Attorney General Schneiderman is a model for technology companies and regulators in local, state and federal government.”
What this means is that Uber can raise prices during “abnormal disruption of the market” (the term used to describe the emergencies set forth in this law); they just can’t go above a set amount. The price caps will be based on the charges of the previous two months, and cannot go higher than the fourth-highest price given. So, if the surges in the past 60 days were 25%, 18%, 12% and 9% more than normal cost, Uber’s emergency surcharge can’t be higher than 9%.
So, what counts as an abnormal disruption of the market? Natural disasters, war, state emergencies, civil disorder, power shortages – anything completely out of the ordinary. If the government has to get involved, it’s a disruption of the market.
What doesn’t count? Uncooperative weather. So don’t think a snow storm or impromptu shower will get you out of a price increase, because it won’t. But it’s good to know that in times of trouble (like a hurricane) we won’t have to spend our life savings on a cab ride home.