Uber's dynamic pricing has been, almost since its introduction, a stable source of controversy. That woman who was charged, because of whopping surge fare, $357 for a 14-mile ride in Los Angeles? Controversy. That winter storm leading to a surge rate of 7.75x? Controversy.
Generally speaking, the controversies are unfounded. Uber is a business, and markets are what they are, and in most circumstances surge pricing is a legitimate byproduct of those two things. Want an Uber at 11 p.m. on December 31? You can pay the surge fare, or you can do whatever you did before Uber came along: taxi or bike or bus or walk. "Surge pricing only kicks in in order to maximize the number of trips that happen and therefore reduce the number of people that are stranded," Uber CEO Travis Kalanick told Wired.
What happened in Sydney today, however, is a reminder of the limits of that logic. As an armed hostage crisis played out in the city's Central Business District, Uber increased its fares by up to four times the usual rate (leading to, in U.S. dollars, a minimum fare of $100).
This was not, apparently, a matter of an overly efficient algorithm. Uber gave, as an explicit justification for its surge pricing, the same explanation it always does: its desire to get more drivers on the road to help out, bringing supply and demand into happy alignment. As the company's Sydney account tweeted,
We are all concerned with events in CBD. Fares have increased to encourage more drivers to come online & pick up passengers in the area.— Uber Sydney (@Uber_Sydney) December 15, 2014
As a matter of pure economics, of course, that makes sense: Higher prices give drivers a greater incentive to get on the roads, which means a greater supply of cars to help people in need, which: win, all around! Doing well by doing good, sort of!
What Uber forgot, though, is that not all situations are primarily economic in nature. Some require consideration beyond the basic—and base—logic of supply and demand and invisible hands. Imagine if Uber had done from the beginning what it has now done retroactively: offering free rides to people trying to get home. Or, better yet, imagine if Uber had simply sent a message out to its drivers alerting them to the situation in Sydney and giving them the opportunity to help people get away from the scene. Some would have done it—because money, thankfully for us all, is not the only way to incentivize people.
Yes, those moves would have made better PR for the company. But they would have made better PR for humanity, too.
What Uber is navigating with its to-surge-or-not-to-surge decisions are, on the one hand, classic tensions when it comes to corporate responsibility. Companies of every stripe have long negotiated the relationship between economic theory and cultural, between capitalism and social capital. The stakes are especially high in Uber's case, though—not just because Uber is popular, but because it is, increasingly, pervasive. Companies like Uber are building not just new technological infrastructures, but new social ones. The implicit promise of buzzterms like "the sharing economy" is that technology, one app and one click at a time, will fundamentally change the way humans relate to each other, on scales that are both mass and intimate. Mass, in this conception, is intimate.
In that sense, Uber's reaction to the crisis in Sydney is not only deeply cynical, but resoundingly so. It has implications far beyond Uber itself, because it implies that cynicism can exist as a matter of social infrastructure. The broken windows theory, at its most basic, proposes that one's environment can affect one's behavior—that aesthetics and architecture, essentially, are their own kinds of user interfaces. Uber, in its treatment of Sydney's riders and drivers, broke a window: It degraded its own infrastructure. The company had the opportunity to see, and therefore bring out, the best in people; instead, it focused on the worst, and precluded opportunities for kindness. It prioritized the "economy" over the "sharing." And, most worryingly of all, it did all that in the name of "concern" for its passengers.
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