Uber, learning from Sandy, caps surge pricing during blizzard

Uber has capped how much prices can rise in US cities during disasters or emergencies, after facing criticism for jacking up prices at times of high demand. In New York City, Uber surge pricing will be capped at 2.8 times — nearly triple — the normal fare.

Eric Risberg/AP/File
A woman leaves the headquarters of Uber in San Francisco. The ride sharing service announced Monday, Jan. 26, 2015 that it will cap rates during the massive winter storm set to hit the Northeast Monday and Tuesday.

 Want a ride home from car service Uber during the major snowstorm descending on the Northeast on Monday? Expect to pay more than the usual fare.

Not too much more, though. After taking heat for raising prices during past storms, Uber has capped how much prices can rise in U.S. cities during disasters or emergencies.

In New York City, surge pricing will be capped at 2.8 times — nearly triple — the normal fare. The San Francisco company is also planning to donate some of the proceeds to the American Red Cross. That's part of its nationwide policy during disasters and emergencies after criticsm when prices surged during Superstorm Sandy in 2012.

At smaller rival Lyft, prices never go higher than three times the regular rate.

The app-based ride-hailing service that has attracted criticism for jacking up prices at times of high demand, has told New York City customers that it will charge no more than 2.8 times the usual fare for trips during the snowstorm that began hitting the city on Monday.

The company is hoping to head off charges of price gouging after it raised fares by much higher multiples during Hurricane Sandy in 2012, which resulted in a flood of criticism that it was taking advantage of stricken customers.

"Due to the State of Emergency declared in New York City, prices will not exceed 2.8x the normal fare," Uber said in an email to users of its app on Monday.

The U.S. Northeast on Monday braced for a massive, crippling blizzard that could dump as much as three feet of snow as tens of millions of people were urged to stay home and airlines canceled thousands of flights.

Uber said all proceeds will be donated to the American Red Cross to support relief efforts from the storm.

The company said the fee policy is in line with an agreement it signed with the State of New York's attorney general in July last year that was designed to prevent massive price surges.

It was not immediately clear whether New York City Mayor Bill de Blasio intends to protest Uber's policy.

"That's the law, that you cannot price gouge in the context of an emergency," said De Blasio at a briefing with reporters about the snowstorm earlier on Monday.

"I think it would be immoral to charge people extra because there's a natural disaster going on," he said when asked whether Uber and other car services should suspend the practice of raising prices at times of high demand.

Uber warned that some cars may be late arriving and may not be able to take passengers to their destinations if blocked by uncleared snow. (Reporting by Bill Rigby in Seattle and Jonathan Allen in New York; Editing by Alan Crosby)

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