Uber has agreed to ban surge pricing in the event of an emergency.
In a deal with Attorney General Eric T. Schneiderman, Uber said it will limit price hikes during "abnormal disruptions of the market," which will include emergencies and natural disasters.
The agreement brings Uber in line with New York's anti-price gouging law, which was passed in 1978-79 amidst escalating heating oil prices. But Uber will also roll out these surge price limits nationwide.
Going forward, Uber will set a price cap during "abnormal disruptions of the market" limited to the normal range of prices it charged in the preceding 60 days. The three highest prices charged on different days during that period will be excluded from the cap.
Disruptions, meanwhile, could include weather, natural disaster, power outage, civil disorder, war, military action, or a national or local emergency.
"This agreement represents the thoughtful application of long-established law to new technology," Schneiderman said in a statement. "It provides consumers with critical protections to which they are entitled under the law – and it provides Uber with clarity from government about how the law will be applied to its innovative pricing model."
Uber's surge pricing has made headlines for years, but was back in the news in December for huge surge prices during an East Coast snowstorm. Uber defended the price hikes, arguing that it was necessary to keep up with demand. But come New Year's Eve 2013, it gave users a heads up in advance that their rides home would cost more than normal.
Users are notified in bold print if surge pricing is in effect.
In a Monday blog post, Uber also said it had partnered with the American Red Cross to donate commissions made on surge pricing to the organization during times of disaster.