Uber looks like he’s playing hardball again – this time in a dispute with the city of San Francisco over grocery delivery charges.
What’s happening: In response to an order from the San Francisco Mayor limiting the fees that restaurant delivery services can charge, Uber’s grocery store on Friday announced it would no longer serve residents of the Treasure Island neighborhood and said it was no more able to finance these operations.
Context: Uber made a name for itself with city governments, but has learned in recent years to moderate its approach in times of crisis.
- The company raised prices in New York City due to high demand when Hurricane Sandy hit the city in 2012. After an immediate and intense backlash, it doubled driver profits and charged passengers standard fares until the storm was over.
- In 2014, the company partnered with the New York attorney general and agreed to limit price increases in natural disasters and emergencies there and across the country. Since then, disputes with officials about crisis prices have largely been avoided.
The fight in San Francisco breaks this pattern.
- “Unfortunately … the restrictions imposed by this order have forced us to update our service area to reduce operating costs,” a spokesman said in a statement. “We remain confident that the temporary changes businesses have been forced to make won’t continue to harm those we want to help most at this time: customers, small businesses and delivery workers.”
- Supervisor Matt Haney, who represents Treasure Island at San Francisco City Hall, accused the company of closing the neighborhood in retaliation for the fee cap.
Between the lines: Unlike a hurricane that lasts for a few days, Uber expects that crisis to continue – and so it’s likely that it will seek to tackle the fee cap, especially if other cities follow suit.
Our thought bubble: Uber is already a money-losing company, but its efforts to keep its losses in check may not win much sympathy, given the current widespread economic troubles and people’s reliance on delivery services.
Go deeper: The gig economy coronavirus test