Yesterday, Daily Beast reporter Olivia Nuzzi decided to engage in some half-assed trolling of the web by defending the awful union-busting car service Uber and their decision to jack up prices in response to an armed stand off in Sydney, Australia. After some taunting from me on Twitter, Nuzzi asked me to explain why I thought her piece sounded like the idiotic ramblings of the annoying libertarian in a first-year con law class.
NB: I’m an American attorney so I’m not going to begin to pretend that I know or understand how Australia chooses to treat Uber or their actions regarding surge pricing. This analysis is All-American.
As a cafe in Sydney, Australia came under siege by a hostage-taking gunman on Monday, those nearby attempted to flee the area. Many of them turned to the popular ride-sharing app Uber, causing the demand for cars to skyrocket and in turn, the company’s so-called “surge pricing” to go into effect, with fares rising to four times the usual rate. The backlash was immediate and aggressive. It was also aggressively wrong.
Literally every state in this country disagrees with you about what constitutes an illegal and unconscionable form of price gouging, but good start.
The fact that Uber allowed surge pricing during a hostage crisis may lead you to believe that the company doesn’t care about you, and you would be correct. But Uber does not have a responsibility to care about you. Uber is not a government entity, and it is not beholden to the general carless public during an unwelcome drizzle of rain or even a time of great distress.
Uber is a stripped down, regulation-skirting fad company that is designed to get its original investors filthy rich before the government (rightfully) legislates it out of existence. In order for the company to be profitable it uses city roadways, state highways, and federally funded interstates, all of which means that the company’s actions are thoroughly within the jurisdiction of any of those levels of government regulation. The fact that Uber isn’t a “public entity” is an irrelevant issue in the face of the law.
I’m old enough to remember a time before Uber––about four years ago––when people somehow managed to get from point A to point B. It’s hard to believe it judging by how some react when they can’t magically summon a car with a few taps of their fingers, but Uber has only existed since 2009, when it was founded as UberCab in San Francisco. Its mobile app launched the following year, and since then it has rapidly expanded from the Golden City to hundreds of cities in 53 countries around the globe. Surge pricing was not unveiled until 2012.
Uber exists because of a general lack of enforcement within public agencies in charge of preventing economic abuses by corporations. In truth that company is frequently flouting laws regarding proper livery registration (which directly serve the public interest in making sure only qualified drivers are on the road), ADA requirements (disability advocates worked for years to ensure access for ALL passengers in taxis only to see Uber fuck that right up), and unionization efforts (people actually died to unionize taxi drivers, an industry made up of large portion of new immigrants, and now all that work is for naught). So to be succinct: this company is one massive lawsuit away from being litigated into the graveyard of bad ideas from the neo-gilded age.
The premise of the program is simple supply-and-demand: when demand for cars increases and supply decreases, Uber’s algorithm inflates the fee for rides accordingly, which the company claims encourages more drivers to work, which puts more cars on the road when people are requesting them most.
This sort of algorithm is explicitly illegal for registered taxis and similar car services because it is fucking abhorrent to take advantage of a disaster like this. If this is cool with you why isn’t the Home Depot allowed to jack up the price of plywood when a hurricane is approaching? All Uber is doing is using a (hopefully) temporary blind spot in the law to enrich its putrid investors.
Surge pricing happens during rush hour and when it rains or snows; it happens on holidays like Halloween and New Year’s Eve; and it has happened during states of emergency like Hurricane Sandy in 2012, after which the New York Attorney General stood Uber down and made them agree not to hike up fares during natural disasters––and he was as wrong as any of Uber’s customers who complain about their inflated fares.
He “made them” do that because their actions violated a long-standing law put in place to protect consumers from awful practices like this. He wasn’t doing it to be a dick.
Agitated Uber passengers often respond to surge pricing by posting screen shots of their astronomical fare estimates or receipts to social media as a means of shaming the company.
Why do you hate capitalism? Bitching about horrible shit that companies do is an essential tactic of consumers to force non-governmental change.
Uber––which is actually not the only method of transportation on Earth, despite what it may seem like….
Those other forms are banned from price gouging by the way.
….warns passengers about the surge before it allows them to order a car, and if the surge is over two times the normal rate, the app forces users to type it in, just to make sure they really understand what they are getting themselves into.
Notice of price fixing is not a defense for the party engaged in it.
As the Sydney hostage crisis unfolded, Uber customers and observers alike took to Twitter to complain about the sky-high fares, calling the policy “Marxian” and “downright predatory.”
To be fair, the person who said that this was “Marxian” is a moron.
Uber responded to the PR nightmare by reversing the surge, refunding those affected, and doling out free rides. They shouldn’t have.
There is plenty to chastise Uber for––I am a frequent and enthusiastic critic of the company’s inadequate background check process––but price surging is not among its sins.
I’m going to assume you cited the background checks issue because you are disgusted by Uber’s intentional decision to disregard the safety of passengers so that they could avoid paying the extra costs associated with performing due diligence in hiring drivers. If that is the case, congrats! You have successfully articulated a legitimate and well-developed critique of why a private corporation does not actually have unchecked discretion to do whatever the fuck they want in the pursuit of profits.
Price gouging is a similar violation of the public interest. As Uber grows it will displace more regulated forms of transportation, thus forcing customers to abide by this disgusting form of gouging.
How does the world owe you a private car, priced as you deem acceptable, that didn’t exist five years ago?
This is a non sequitur. People are asking that Uber be subject to the same laws that other car services must abide to in order to have the state’s permission (via a local licensing authority) to use publicly financed roadways.
If you don’t like Uber’s surge pricing, you are still welcome to travel by subway, cab, bus, camel, horse and carriage, or you can just fucking walk.
Please feel free to explain this to someone who doesn’t live in an area with reliable public transportation and would like to get home from their job/bar/friends house safely and legally.
If none of those options appeal to you, you might consider meandering over to a country with a different economic system.
Anarcho-Capitalism isn’t the economic system of this country (despite what the editors the Daily Beast might believe).