Free «Personal Perspective: Uber's Controversy» Essay Sample
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Hurricane Irma is imminent in the state of Florida and the locals of south Florida are on the move as they seek shelter from the raging storm. Apparently, the subway will be disrupted as it was in the past, by the adversaries of nature and most people will turn to private car rides (taxis) for their transport needs. As Debora Lima (2017) reports in South Florida Business Journal, Uber Florida spokesman Javi Correoso reported that the ride-sharing taxi company would cap its prices although he could not confirm the price value at the time of speaking. One would question why the ride-sharing taxi company was quick to announce the price cap. The answer to this question is vivid; Uber wants to steer clear of controversies that rock it from time to time with the firm being immensely criticized by the media and customers alike due to what has been famously termed as price surging whenever there is an emergency. Uber has for some time now been in a negative relationship with the media especially due to its price surging model during emergencies, a controversy, which when treated to a personal perspective, is justified from both ends of it but is likely to do very little to hurt the firm’s business.
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Uber’s Negative Relationship with the Media Controversy
Despite the heavy followership in the US, Europe, Asia and even some countries in Africa, Uber has not been able to steer clear of media’s skepticism. Sam Frizell (2014) reported of 7 controversies that have hit Uber but with seemingly little impact on the firm’s business. As Frizell (2014) posits, Uber has always been on the media’s lenses for the wrong reasons due to its aggressive techniques to thrive in the personal car ride business, which is perceived to be disruptive to the old-fashioned taxi services across the streets of major cities in the US and Europe. Apparently, this scrutiny by the media on Uber’s affairs got on the wrong side of the firm’s Vice president for business, Emil Michael. In 2014, a Buzzfeed editor is reported to have overheard the scheme of the Vice president in which the firm purportedly intended to spend a million dollars to obtain the services of four top private investigators and four journalists (Frizell, 2014). The reasons have been interesting for public. Ostensibly, the press has been so much on Uber's necks and it was a time to give them a taste of their medicine. The team would retaliate to the unwelcome treatment by the media by looking into the private lives of the journalists and their families in return. It was a scheme to use the press to fight back and embarrass those journalists that were critical to Uber. These were allegations that Michael would excuse himself against saying that they were not reflective of his actual views.
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The same remarks made by Emil Michael were reported by Geoffrey Smith (2014). Smith singles out Buzzfeed as one particular media house that has been on Uber’s heels aggressively covering in detail of Uber’s cultural misdemeanors as it terms them. Buzzfeed was reported to have made an expose of an initiative by Uber in France’s Lyon to work alongside an escort agency (Smith, 2014). This allegation brewed another storm between the media and Uber when a private blogger Sarah Lucy on PandoDaily accused Uber of sexism and misogyny.
These though are not the only incidents of media criticism that Uber has been involved into. On the close of October 2012, New York City was hit by a storm which ousted the subway services and increased the demand for Uber drivers (“How a hurricane Sandy-related PR nightmare”, 2012). As a result, Uber was forced to pay their drivers double to motivate them to go out and pick up customers, and as customers and journalists criticized Uber for the price hike Uber was forced to charge normal but pay the drivers double. The ending point in this situation was put by a nasty column by Paul Carr on PandoDaily accusing and sarcastically referring to Uber as Robin Hood robbing from the rich as New York flooded. In this ordeal, Uber lost over $100,000, which is a huge sum for a firm that was trying to get its footing in business, in order to quell the outrage and negative portrayal by the media (“How a hurricane Sandy-related PR nightmare”, 2012). A week prior to these happenings Carr had apparently written a column about how Uber’s CEO was fascinatingly reckless with disrupting government legislation.
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Uber’s Price Surging Controversy
The strained relationship Uber has with the media is not its worst nightmare; its worst worry is borne of its price surging model during peak times. Uber’s prices for its cab services soar during times of emergencies like the storms, terror attacks or other peak times like at the end of a football match, a soccer match, when people are leaving the theatre or other social gatherings. The facts behind surge pricing are simple. First, prices for Uber services are generated by an algorithm that proportions the price to the demand, i.e. when demand goes up, the price does so as well (Moore, 2017; Riley, 2017). This is meant to attract drivers to the areas with high demand, but the surge in prices is usually suspended in times of emergencies and disasters. Second, in emergencies or not, the rise in demand calls for price rise, the price is a life saver and it is not just about money, it is also about information (Stossel, 2017). Prices are informants to the suppliers of what the customers need. However, despite all these facts, Uber has been repeatedly accused of price gouging from its price surging model.
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At the beginning of November 2012, when Hurricane Sandy hit New York, Uber initially responded to the disaster by price surging before it reverted to its normal prices after heavy criticism from fans and media. Uber still paid its drivers twice the normal pay losing up to $100, 000 and in an honest blog, the company announced that it was reversing to price surging in order to meet its obligations to drivers and customers only a day later (“How a hurricane Sandy-related PR nightmare”, 2012). In 2014, Uber publicly confessed and apologized to victims and customers for raising their fares following a gruesome hostage crisis in Sydney, Australia, (Roberts, 2016) a move it was criticized for. In early July 2014, Uber negotiated with Eric Schneiderman, New York Attorney General, and agreed to limit (but not expunge) price surging during calamities and emergencies (Luckerson, 2014). The firm agreed to lower its price and cap it below the 3 highest valued days in the last 2 months leading to the deal during emergencies and disasters because its price surge in such times was a violation of price gouging laws. Elsewhere in New Delhi, India, the Chief Minister Arvind Kejriwal banned price surging by Uber, like company Ola in times of high demand, citing interference with market mechanisms as grounds for the ban (Jagannathan, Apr 21, 2016). In September 2016, Uber was again under fire for its price surge following a terror attack in Chelsea, NY (Roberts, Sep 19, 2016), but the firm used Twitter to announce the suspension of price surge in Chelsea just moments after the explosion. In early June 2017, Uber again came under a heavy criticism from a section of users and the press who used Twitter to express their dissatisfaction with Uber after the London Bridge terror attack (Moore, 2017; Riley, 2017) although the firm responded by claiming that it suspended the model immediately they became aware of the disaster covering the entire central London. Despite its suspension of the price model, Uber was still heavily slammed for allegedly taking too long to affect the suspension (Riley, 2017), which evidence shows happened 42 minutes from the time disaster struck.
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Personal Perspective on the Controversies
From a personal viewpoint and in rationally assessing Uber’s ill relationship controversy with the media, Uber's situation is absolutely justified and justifiable. Concurring with Adrienne Lafrance (2017), the controversy and bad reputation plaguing Uber have greatly been yielded by misinformation. Driven by an insatiable need to have a scoop for their viewers, readers, and followers, the press has failed to read the logic and rationale behind some of the steps Uber has taken, especially in pricing. Moreover, some of the negative statements leveled against Uber come from taxi drivers whose market has been disrupted by the convenience and reliability of Uber that has robbed their clientele. On top of it, in capitalist economics, the law of demand and supply dictates the prices. As seen in times of emergencies, demand for provisions go up and buyers flock the stores to stock their houses with what they need in the time the crisis will prevail. If the store owners do not adjust their prices up with the rising demand, only the first customers will get what they want, but if the prices are adjusted accordingly, people buy less and more people get what they need. What is more, the store owner is incentivized to go out and risk restocking their stores (Stossel, 2017). In the same manner, the price surge is what lures Uber drivers to go out and risk their lives and safety to offer services to those in need; it is the incentive that Uber offers them to ensure that supply is not short of demand.
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Furthermore, there is no a day in an ideal or a real market that the prices will ever stay constant, fluctuations of prices is inevitable and is a product of the interplay between demand and supply. In addition, Uber is not the only culprit of price surge, even the ordinary yellow taxi drivers equally raise their prices whenever the need arises and Uber only takes the thrashing due to its dominance. Legislating on price surge in the name of price gouging neither protects the underdog (the traditional taxi drivers) and neither cushion the customers (Jagannathan, 2016); in fact, should the drivers not be incentivized to risk their lives for the customer’s sake, the customers cannot get the services they require and this will hurt more. The bitter truth of the matter is that prices will always surge in times of emergencies and this by no means a way of players enriching themselves, it is the sure way of sustaining life and business during such times but suppliers should always act within rational figures. Owing to the fact that Uber prices are algorithmically-generated, people should be aware that an algorithm cannot differentiate a calamity from other peak scenarios and thus the price surge ought to take some time before the operators learn of the disaster and act to suspend to; it is only rational that the suspension cannot be effected instantaneously. Nonetheless, fraudulent business operations, like Hell and Greyball apps that Uber is guilty of should be condemned vehemently.
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Though Uber is a young firm, the LA based company has not been shy of controversy with its PR and reputation being tainted by numerous dossiers and exposes by the media. Most of the tantrums from the media have been revolving around Uber’s business model and operations. The ride-sharing giant operating globally has not been endeared to the traditional taxi drivers and firms. There has been a heavy criticism on Uber because of the price surging model of raising fare prices in case of emergencies and other peak times. Skeptics have slammed Uber for making fortunes by overpricing in times of disaster. The fact is that despite the desire to have its prices normal, Uber cannot achieve this in times of emergencies. In order to incentivize their drivers to deliver services to customers, they have to reimburse them adequately calling for the need to raise the prices. Uber has however been kind enough to suspend price surge in times of disasters and still continue to serve customers. Uber’s actions have been in good faith for the benefit of the customers and drivers alike, but with all the justification for the price surge, underhand business operations arising from the controversies are highly condemned.