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Uber, Lyft criticized for surge pricing after NYC subway shooting

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Yahoo Finance Live breaks down the criticisms ridesharing companies Uber and Lyft are facing from users over surge pricing following this week's Brooklyn subway shooting

Video Transcript

ERIC ADAMS: We got him. I said to New Yorkers we want to protect the people of this city and apprehend those who believe they can bring terror to everyday New Yorkers.

DAVE BRIGGS: "We got him." That's New York City Mayor Eric Adams confirming during a press conference today that the man wanted in Tuesday's mass shooting at a Brooklyn subway has been arrested. He's 62-year-old Frank James. Meanwhile, just after the shooting, outrage aimed at both Uber and Lyft, with the questions coming, did they attempt to profit from the mass shooting?

Well, both initially instituted surge pricing immediately after the shooting in the New York City area. While Lyft suspended theirs, Uber only suspended theirs during that shooting and right there in Brooklyn, where it occurred. You can see some screenshots from several users throughout the ordeal that were terrified, trying to get out of the scene, posting screenshots of the massive surge fees for short rides into Manhattan. As a result, both companies have issued statements.

Let's go ahead and read you the statement here from Lyft first. I do believe we have that. Here we go. Lyft saying, we are working to adjust fares for certain riders who paid primetime prices when the situation first unfolded. Again, Lyft did suspend that pricing while Uber kept it on for most of the city, not in Brooklyn.

And here now is the statement from Uber as well, reading, following the incident, Uber disabled surge pricing in the vicinity and capped pricing citywide. If anyone on our platform experienced unintended charges during this emergency, we will work to get them refunded.

This is a difficult moral situation, of course, for tech companies. It's certainly an algorithm, guys, that determines surge pricing when demand peaks in certain areas. But once you realize the circumstances, the question are, is it OK for a company to use surge pricing in moments of tragedy? One could argue that that's the business model. Rachelle, what do you think?

RACHELLE AKUFFO: I do think you raise a fair point with the algorithm in terms of how soon it can really catch up with an emergency that evolves, and then as you mentioned, though, then trying to do the right thing afterwards. And we did see Uber and Lyft there both trying to sort of say, look, we can try and adjust these prices. And obviously, surge pricing isn't something new, but when it's attached to a tragedy, obviously, we're going to have a very visceral reaction to it.

But we have to remember, these are private companies. They're not-- as in they're not government-owned properties. And so I do feel like they're in a difficult position, especially since you also have these drivers who maybe they don't want to go into a dangerous situation. So if they have to get paid more to then have to risk their lives, we also have to consider that as well.

BRAD SMITH: Yeah, certainly, and then who does the onus fall on to make sure that the drivers are fairly and adequately compensated for that? And I think many of us in this situation would say that there has to be a medium where Uber or Lyft do have a side or some type of extreme condition type of fund that they put together and have for instances like this, where if there is a citywide notification that goes out to avoid an area, and people are trying to get out of that area, that fund can get activated to ensure that these services are still made available for the drivers that want to be able to safely escort people from that premises, and then, additionally, for the passengers to not see surges as well.

And so I think that is something that also needs to actively and more acceleratingly be considered by these two companies in particular. But that is something that we will see how they measure this going forward, but it should not be this forced kind of litigation that the passengers and the drivers have to go through on the other side.

DAVE BRIGGS: Not as simple as it seems on the surface, but a tough situation for all involved. Good to see there was an arrest.