A final word on this Uber nonsense, but an important one.
For the past few days, following Wednesday’s price-gouging scandal, Uber’s spin machine has been on overdrive. First came this doozy of a piece by Nicholas Carlson on Business Insider in which he praised Uber’s “act of generosity” before railing against my own “obnoxious punditry.”
An equally snow-jobby piece on the Huffington Post soon followed and, just to make sure everyone was clear that the 50 dollar cab company was a latter day four-wheeled Mother Theresa, Richard Levick, a specialist on corporate damage control, trotted out a thousand words or so for Fast Company, again claiming “Uber’s Good Deed Doesn’t Go Unpunished.”
“One blogger epitomized the “rush to judgment” nature of today’s digital media environment–penning the headline “As NY floods, ‘Robin Hood’ Uber robs from the rich and… Nope, that’s about it.” To its credit, Uber responded well to the misinformed criticism. It reinstated its normal prices for one day, and took a $100,000 hit in the process.”
The key phrase there is “for one day.” By last night, Uber’s surge price was back in effect, although the company generously dropped its own cut of the profits (which, handily, protects them from liability under New York’s anti-gouging laws)
The narrative, being furiously spun by Uber and gullibly reblogged by hacks like Carlson (whose motivations we can only guess at) is that by doubling their prices in the aftermath of Sandy, Uber was able to get more drivers on the road to help New Yorkers get around their flooded city.
It’s a heartwarming story of supply and demand, leading prominent Randian dipshits like MP3.com CEO Michael Robertson to tweet, without a scintilla of irony that…
(AirbnB, by the way, did handle Sandy flawlessly. Proactively axing their fees in order not to profit from the thousands of people left homeless by the hurricane. It’s no coincidence that, unlike Uber, the company has also chosen to drop its blanket hatred of regulators and instead work to get inconvenient hotel laws changed rather than simply ignoring them. But that’s a post for another time.)
So, yes, Uber’s “our price increase put more cars on the road” narrative is a highly plausible one. But there’s just one problem with it. And it’s a problem that deserves capital letters, bolding, and possibly a bigger font…
IT ISN’T TRUE.
According to Uber’s statement, republished in its entirety by Carlson on Business Insider, “With limited public transportation, demand for Uber rides is astronomically high. That means we’re working to get as many drivers out as possible to help New Yorkers get around the city.”
But there is not a single shred of evidence that drivers were choosing to stay home on a day when hundreds of thousands of New Yorkers were crying out for private transportation. On the contrary, there were numerous reports of drivers picking up passengers for free between paid jobs to make sure everyone could get a ride, even if they couldn’t afford it. But staying at home? When was the last time you heard of a driver leaving cash on the table on a day when tips flow like… well.. water?
And there’s the rub. Uber’s fare doubling had nothing at all to do with getting drivers on the road — and everything to do with getting those drivers on to Uber. Drivers who knew they could probably get far bigger tips by taking private jobs (Uber’s tip to drivers is fixed at 20 percent) needed to be convinced to sign on to Uber. Otherwise all those fares were going straight to the drivers and Uber wasn’t getting a dime!
Oh, come off it, Paul. That’s just a conspiracy theory. There’s no way that Uber would implement a pricing structure that did nothing except to make it more expensive for New Yorkers to get cars that were already on the road. That would be grotesque. That would be vile. Good luck proving…
Wait? What’s that, Uber investor Shervin Pishevar…?
Wow. Pro-tip, Uber: Next time you launch a campaign to snow gullible bloggers, make sure your investors get a copy of the memo too.