New York City Council Members Take Aim at Uber Surge Pricing

January 14, 2015 by Verena Dobnik

New York’s turf war on wheels reached fever pitch Monday as City Council members grilled representatives of the app-based Uber service — a fierce competitor of the city’s 13,000 yellow cabs hailed with a flailing hand.

When first offered in New York in 2012, Uber rides were less expensive than traditional black car services but more than cabs. Now, critics say, pricing has become increasingly unpredictable, and rides can cost up to seven times more in high-demand times or when riders get stuck in traffic.

At the City Council hearing, Uber public policy expert Colin Tooze acknowledged that a $100 ride, say, could snowball to $700, but only if a customer doesn’t pay attention to a preride estimate.

Councilman David Greenfield shot back that New Yorkers don’t take kindly to being ripped off — even by consent. And when fares soar, “it’s cheaper to take a helicopter than Uber.”

The Brooklyn legislator said Uber has touted rides as costing less than a yellow cab — but only in certain quiet times, like in summer.

“Then they hit you over the head … bam! … with a higher price,” he added. “If that’s not price gouging, I don’t know what is.”

Tooze responded by saying that under what he called “dynamic pricing” at peak demand, users who preregister with a credit card must first accept a price estimate before getting into a vehicle.

Still, said Ydanis Rodriquez, chairman of the council’s transportation committee, surge pricing takes advantage of customers when they’re in a crunch.

“App-based technology has created confusion regarding dispatching and accountability,” he said.

The bottom line, Tooze said, is that in New York, Uber’s fleet of cars and 10,000 drivers offer “a hassle-free way to move around.”

Councilman Antonio Reynoso said Uber fills a gap in the four boroughs outside Manhattan where yellow cabs are scarce. City-approved, green “Boro Taxis” operate there, now bolstered by Uber cars.

Minority residents of some neighborhoods who get passed over for a cab by prejudiced drivers can count on Uber, he said.

Some council members want rates capped, though.

“That would be un-American,” said Reynoso. “Let the market drive the price.”

City officials last week temporarily shut down five of Uber’s six New York bases for refusing to submit transit records. Service also was banned in Madrid, Spain.

Drivers and owners of taxis say Uber and other similar, smaller companies are taking a bite out of their income — while setting their own rules.

Also testifying Monday was Taxi and Limousine Commissioner Meera Joshi, who also supports an Uber maximum rate cap, such as on taxi rides to airports.

“New York City for-hired transportation is a complex, dynamic industry,” she said. “Overall, this is a really good thing: New Yorkers have more options for getting around where the need to go than they did just a few years ago.”

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