Ride-hailing service Uber has agreed to cap its prices during emergencies after being accused of price gouging during Hurricane Sandy, when it dramatically raised the cost of transportation.
Uber announced the agreement on Tuesday with New York Attorney General Eric Schneiderman, who had criticized the company for its “surge pricing.” Uber said it plans to apply a similar policy nationally.
The price limit covers all of Uber’s services, including UberX, Uber Black and Uber SUV.
The official agreement technically honors any “abnormal disruption of the market.” Those include stress from weather, convulsion of nature, war, military action, or anything that results in “the declaration of a state of emergency by the governor.”
“This agreement represents the thoughtful application of long-established law to new technology,” Schneiderman said in a statement, referring to existing New York law that prohibits price gouging. “It provides consumers with critical protections to which they are entitled under the law.”
“This policy intends to strike the careful balance between the goal of transportation availability with community expectations of affordability during disaster,” Uber CEO Travis Kalanick said in a statement.
Uber’s surge-pricing policy means that rides can cost two or three times more during certain periods of high demand, including New Year’s Eve. Such increases for non-emergency events will continue.
On Monday, Uber announced a temporary 20% price reduction for its cheaper UberX service in New York City. It came just before Lyft, a competitor, said it would start service in New York on Tuesday.
