Uber price "surge" draws fire amid Sydney standoff

[presence]

APDecember 15, 2014, 5:41 AM
Uber price "surge" draws fire amid Sydney standoff


Australian police hold a position outside the Lindt Chocolat Cafe in Sydney, where a gunman was holding a number of hostages, Dec. 15, 2014. Channel 10

SYDNEY -- The cab-hailing company Uber was promising free rides and refunds Monday for people fleeing central Sydney after coming under criticism for hiking prices during a hostage crisis that was unfolding there.


Technology news website Mashable reported that Uber was briefly charging customers a minimum fare of 100 Australian dollars ($82) and four times the usual per-mile rate to leave the city center. Uber said on its smartphone app that the rates had been increased because "Demand is off the charts!" according to Mashable.
But Uber, which offers a service based on hailing taxis from its app, quickly backtracked after an outcry on social media.

The company explained that it had used automatic "surge pricing" to encourage more drivers to get online and pick up passengers.
It wrote Monday on its Sydney blog that it was in the process of refunding people who had already paid the excessive fares and was giving free rides to others wanting to leave.
"We are all concerned with the events happening in Sydney," Uber wrote on the blog, adding that its thoughts were with those affected by the crisis and the New South Wales police force.
Many users had earlier expressed outrage: "you are horrible. Taking advantage of a situation to make a buck. If u were the only way home, I'D WALK!" wrote one person on Twitter under the hashtag #ubersydney.
The crisis began Monday morning when a gunman took an unknown number of hostages at the Lindt Chocolat Cafe in downtown Sydney. The usually busy area became deserted as Christmas shoppers fled, offices were evacuated and streets closed.



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http://www.cbsnews.com/news/uber-syd...s-out-of-amid/


This seems like a no brainer to me... hazard pay for hazard situation... seems like the Uber software was working perfectly.

[mczerone]

Many users had earlier expressed outrage: "you are horrible. Taking advantage of a situation to make a buck. If u were the only way home, I'D WALK!" wrote one person on Twitter under the hashtag #ubersydney.

First - they weren't the "only way home." Uber isn't the service that has a monopoly on taxiing.

Second - So there's a situation in ONE cafe, you don't have to drive 20 miles away to avoid the danger zone. Just walk a block away...

[CaptUSA]

This seems like a no brainer to me... hazard pay for hazard situation... seems like the Uber software was working perfectly.

Exactly. Nothing like taking a perfect free market and screwing it up because it works like it's supposed to!

Price controls create shortages. Remember that.

[NACBA]

Surge pricing is automated.
Uber took action to cap surge & made trips free for riders.

http://t.uber.com/sydfree

[jmdrake]

Surge pricing is automated.
Uber took action to cap surge & made trips free for riders.

http://t.uber.com/sydfree

How is that going to work exactly? Who will pay these drivers for the "free" rides?

[Tod]

Someone was complaining about Uber "taking advantage of" intoxicated passengers by raising rates at peak demand...

http://www.slate.com/blogs/moneybox/...nk_people.html

I guess people should be free to get bombed and then not have to suffer any consequences for the business transactions they make while inebriated!

[Occam's Banana]

"you are horrible. Taking advantage of a situation to make a buck. If u were the only way home, I'D WALK!" wrote one person on Twitter under the hashtag #ubersydney.

It's not a "greed" thing, $#@! - it's a "reality" thing ...

Ceteris paribus, prices go up when demand increases.

[Tod]

It's not a "greed" thing, $#@! - it's a "reality" thing ...

Ceteris paribus, prices go up when demand increases.

It is so discouraging, sometimes, hearing so MANY people with the mindset of "there oughta be a LAW!". Control, control control.......can't just not use the service if they don't like the price. I see that ALL the TIME on various facebook gun buy/sell/trade groups.......people complaining about someone asking "too much" for this or that, wanting the person to be banned or something for "price gouging".

[Henry Rogue]

Exactly. Nothing like taking a perfect free market and screwing it up because it works like it's supposed to!

Price controls create shortages. Remember that.

Yes. Resources flow to higher prices, increasing competition and satisfying demand. Preventing shortages and ultimately lowering prices. Consumers choose to pay at the higher price or find alternative uses for their money. Price signals prevent chaos.

[Brian4Liberty]

Surge pricing is automated.
Uber took action to cap surge & made trips free for riders.

http://t.uber.com/sydfree

Sounds like they may need to adjust their algorithm. They might want to cap their price increases due to demand. There is more to business than just pricing. Marketing, PR and reputation also play a role.

Uber's reaction (free rides) is also a function of the marketplace.

[axiomata]

If they put a ceiling on the cost what's to get other potential drivers off their bums and onto the road to meet the demand?

[dannno]

The company explained that it had used automatic "surge pricing" to encourage more drivers to get online and pick up passengers.

Where's the problem??!?

[Indy Vidual]

How is that going to work exactly? Who will pay these drivers for the "free" rides?

Their Uber-socialist division will pick up the tab and pay the drivers.

[dannno]

How is that going to work exactly? Who will pay these drivers for the "free" rides?

People get 'free ride' promotions from Uber all time... the drivers still get paid, Uber takes 20% of the fares from EVERY ride and pretty much all they do is operate the network and provide customer/driver support so they have plenty of money to pay the drivers with.

[Brian4Liberty]

If they put a ceiling on the cost what's to get other potential drivers off their bums and onto the road to meet the demand?

4x pay isn't enough to motivate Uber drivers? This was an acute and short term event. No doubt every available Uber driver was out there during this time. It takes time to ramp up supply.

Where's the problem??!?

Blowback?

[phill4paul]

And hotels raise their prices when a convention is in town. Airlines raise their prices during "peaks." What's the problem?

[dannno]

Blowback?

Blowback as a consequence of economic ignorance.. I have no problem with Uber picking up the fares and doing damage control, it's a lot easier than explaining economics to retards.

[Brian4Liberty]

From Reason:

This Surge Didn't Work Either: Uber Withdraws Price Hike During Sydney Hostage Situation

Nick Gillespie|Dec. 15, 2014

I'm a regular user of Uber, the smart-phone-enabled ride-sharing service that has upended traditional taxi service in the dozens of cities it serves.

But goddammit if they people running the show at Uber aren't just turning out to be terrible. Not only are they getting in bed with the very municipal governments that were trying to cab-block them, they did this in Australia:

"After an armed gunman took patrons of a Sydney chocolate shop hostage during rush hour Monday morning, the transportation company Uber quadrupled its fares for panic-stricken customers fleeing the central business district.

It charged a minimum of $100 ($82 U.S. dollars) to escape.

As the Sydney Opera House and other buildings were evacuated and images flashed on TV screens of hostages holding a flag bearing the message “There is no God but Allah” and “Mohammed is the messenger of God,” Uber tweeted it was raising prices.

The company has defended what it calls “surge-pricing” as necessary to encourage more drivers to pick up passengers when demand is high.

Within an hour, Uber backtracked after the media publicized customer complaints of price-gouging."

Take comfort in that last bit, folks. Part of the market process is customer feedback and public relations. Early on, Uber had great p.r., partly because they were (and still are) providing a service people really want at prices they're willing to pay. But given the company's mounting "$#@! problems," they really need to think things through a bit more. It's one thing to enact surge pricing during rush hour and even really bad weather events (most riders are grateful for rides even as the price gets dear). But there are going to be times to take a pass too.
...
http://reason.com/blog/2014/12/15/th...er-uber-withdr