When disaster strikes, count on Uber to cash in.
Last week’s East Coast snow storm had San Francisc0-based car-on-demand service Uber in the news for all the wrong reasons.
The pile-on started when Uber unleashed it’s algorithmically-generated “surge pricing” on New Yorkers affected by the blizzard. As you can see in the screen shot above, minimum fares shot up to $175 for people who were stranded, and in need of help. Surge pricing is meant to compensate drivers for periods of high demand, Uber says, and people are free to decline a ride in a free markrt. But when there’s a transportation emergency that causes a 7X surge in price, it certainly seems like invisible hand is gouging.
The fun didn’t stop there. After it took a schellacking in the East Coast media, an Uber passenger in Los Angeles came forward with a horror story about being charged $357 for a 15-mile ride. Uber co-founder and CEO Travis Kalanick added fuel to the fire, saying that very few people accept such high multiples, which many in the blogosphere took to mean that prices are deliberately unaffordable.
And things had been going so well for Uber lately.
Uber as public relations gods
Uber had scored major public relations wins over the last six months with a number of human interest campaigns grab headlines and simultaneously emphasize the convenience of transportation on demand.
In July Uber delivered popsicles and ice cream in cities throughout the U.S. October was National Cat Month, during which time Uber delivered warm fuzzies nationwide, bringing adoptable, snuggly cats to people’s homes. The publicity stunt was pulled off in with collaboration with cat-loving media empire Cheezburger Network, and local animal shelters. And until last week Uber had been in the spotlight for delivering Christmas trees in partnership with Home Depot.
But press this good doesn’t last forever.
Amongst early adopters Uber has attained the coveted status of a verb–like Xerox or Google–shorthand for convenience, and on-demand anything. Countless startups pitch themselves as Uber for _____. Uber for dry cleaning, Uber for private planes, and so-forth.
Public relations goat
Über sparred viciously and publicly with the Taxi And Limousine Commission in New York over their right to operate in the city without the permits that govern other ride providers. A similar spat occurred when Uber planned to begin operating in Washington D.C. Uber drivers in San Francisco staged a protest near the company’s San Francisco office, agitating for better pay and conditions.
At the Failconf 2011 Uber founder Travis Kalanik told the harrowing tale of his previous startup, and its five-year struggle to exit. In light of the startup grind he endured, it’s somewhat ironic, or perhaps emblematic that his success has turned the founder heartless.
Uber has weathered a public relations storm or two, and always manages to come out ahead. In spite of all the ill will the startup has provoked, crying foul doesn’t solve the problems of urban mobility. For people willing to pay higher prices, and those who can afford to be “surged” Uber is a real life saver.
Uber recently raised a blockbuster $250 million round, at a $3.5 billion valuation, led by Google Ventures. I once heard someone speculate that the investment from Google could be a move towards operating a fleet of self-driving, on-demand cars in urban areas. Adam Vacarro recently argued in Inc. that Uber is the future of logistics, not personal transport. And all the negative attention the company has received in the past week will just drive awareness among people who never knew they could use their smartphone to hail a chauffered car to their exact location.
So maybe, just maybe Uber has figured out the public relations thing after all. They