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Uber decision making abilities under test

December 24, 2014 9:58 PM
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The firm raised fares by as much as four times its normal rate when demand shot up during the siege that left three people dead.

Its “surge pricing” algorithm increased fares during the peak period as people rushed to leave the area.

Meanwhile in South Korea, prosecutors have charged the firm with running an illegal taxi service.

They have accused Uber’s chief executive Travis Kalanick, along with the firm’s South Korean business partner, a local car rental firm.

Car rental firms in the country are banned from running taxi services with their own vehicles.

It is the latest in a string of legal challenges around the world to the rapid expansion of Uber, whose smartphone app lets a passenger hail a taxi while simultaneously letting the driver calculate the fare.

On the day of the Martin Place siege in Sydney, Uber came under heavy criticism on social media for raising its fares, so it started offering free rides out of the city.

It also said it would refund the cost of the rides that had been affected by the higher fares.

“The events of last week in Sydney were upsetting for the whole community and we are truly sorry for any concern that our process may have added,” Uber said in a blog post on Tuesday.

“We didn’t stop surge pricing immediately. This was the wrong decision.”

The 16 hour siege ended with three people dying, including the gunman Man Haron Monis.

The company said that its priority was to help as many people get out of the central business area safely, but that was “poorly” communicated, and led to a lot of misunderstanding about its motives.

“This [surge pricing] encourages more drivers to the area where people are requesting rides,” when demand outstrips the supply of cars on the road, Uber said.

Uber has defended its surge pricing strategy in other cities, but reached an agreement with regulators in the US to restrict the policy during national emergencies.


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