Smart economics or just bad taste?
After a bomb injured dozens in New York City’s Chelsea neighborhood on Saturday, people called the ride-service Uber to take them to safety. The vehicles arrived as promised but with a catch: Uber nearly doubled its fares from normal rates.
The decision to impose so-called “surge pricing,” which Uber uses during periods of high demand for its cars, led to complaints on social media as customers accused the company of price-gouging. Uber, for its part, told Fortune that it removed the price increases in Chelsea almost immediately after learning of the explosion.
Here’s how it played out on Twitter, where customers began recounting their experience after news of the bomb, which went off around 9:30 p.m.:
Here’s a tweet from Uber, announcing it would suspend the surge fares. Note the time stamp on the tweet is very shortly after news of the explosion, and comes well before the customers’ complaints (it’s unclear if the customers are misinformed or just posted their complaints well after the ride).
Uber also appeared to be working to refund surge fares to customers:
This isn’t the first time Uber has landed in controversy for introducing surge prices during a terror scare. In 2014, the company said it was “truly sorry” for raising prices during a deadly hostage taking episode in Sydney, Australia.
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During the Sydney episode, however, Uber also argued that surge pricing made sense because it gave drivers an incentive to get on the road.
The argument makes sense from the perspective of market theory. After all, drivers are unlikely to head towards an active terror scene without a financial incentive, and some people even defended Uber’s initial decision to impose surge pricing after the New York bomb:
Overall, though, the majority of people appear to be uneasy with companies using emergencies or tragic events to earn extra profits. In 2014, New York’s Attorney General Eric Schneiderman announced an agreement with Uber in which the car company agreed to make its policies conform to a state law that restricts price-gouging during disasters.
This story was updated at 11am ET to include Uber’s response and to provide additional context.