Uber Agrees to Cap Pricing During Emergencies

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July 8 (Bloomberg) -- James Corless, director of Transportation for America, and Bloomberg's Matt Miller discuss Uber reaching a deal with the New York Attorney General Eric Schneiderman to limit its pricing tactics by capping fares during emergencies and natural disasters. They speak with Emily Chang on "Bloomberg West." (Source: Bloomberg)

These moves recently by uber, and lift joining the competition in new york today?

You're seeing an explosion of these mobility providers that are providing transportation services.

The iconic yellow cab, we always wonder if that's going to actually put the cab out of business.

Really this is suggesting a bigger disruptive shift in transportation.

It's actually much bigger market force, not just new york city but actually around the country and around the globe.

People are looking for easier, more convenient ways to get from point a to point b. young people are less interested in actually owning a car and more interested in living in urban lifestyle in cities.

New york is such a unique market, it has been -- cap said been so available for so long.

What do new yorkers want?

Do you guys like uber and are you interested in lift?

It's a little bit more of an expensive experience than taxis.

They have come down for their pricing on their lower-priced products.

I think new yorkers would love the taxi situation itself to get better.

It is so awful a situation for the drivers, it's an awful situation for the passengers.

The cars are a outdated and uncomfortable.

The bureaucracy and the regulation, big government mixed with a small group of owners of these ultra expensive medallions have really made the taxi experience a bad one.

There has to be an alternative.

Uber is a great one at the top in and lift is a great one at the lower in but they are different areas on the spectrum, as far as income is concerned.

I do have so many bad memories of trying to catch a cab in new york in the rain or whenever they were changing over the times and nobody knew who was picking someone up.

But you can use them at a cheaper price point.

You can also use halo, which is a tlc lead service to help you hail a yellow cap.

If you are more comfortable experience, it you can use the typical uber, which is the black car experience or size up and get the suv experience.

For regular taxi users, anybody can get a cab with his or her phone.

The question is, which cost level do you want to go to?

Lift is focusing really on brooklyn and queens in their introduction.

The website says brooklyn is the city where they are located.

They are trying to serve the more underserved communities, the outer boroughs.

Or trying to hit the lower-cost experience, and uber focuses on big, expensive manhattan island.

They have dropped theirs in san francisco, l.a., and boston.

Buber is losing money on some of these transactions.

What is the strategy?

Have done a lot of expansion very quickly.

They have been capitalized in a major way.

They are having lots of regulatory difficulties, as everybody is in this space.

They have reduced their commissions on some of the rides.

I think it's a pretty big bet on a future way to provide urban mobility and suburban mobility across the country.

They are clearly making a calculation.

They will take a loss, they will take less revenue because they think it market is only going to get edgar and bigger and in places far beyond -- going to get bigger and bigger and in places far beyond new york.

They have raised over $1.5 billion in order to do that, where as lyft has only raised $250 million.

I read into sting article that compared uber to amazon and the pricing strategy -- i read an interesting article.

I don't think that is the long-term strategy for uber.

They are making this move repeatedly to try to make sure they get a bigger slice of the pie away from taxicabs.

It's still going to be a higher-priced product.

For that you get convenience and a more comfortable ride.

The interesting story today is the deal uber made with the new york attorney general, eric snyderman.

They are agreeing to cap their prices at times of natural disasters, only when the city is in a state of emergency.

When no other yellow cabs are on the street.

No caps off or wants to risk it for the low price.

The genius of uber was that when demand was high and supply was low, the pricing helped equalize those things.

What the new york attorney general has brilliantly done is take that genius solution out of it, so next time there is a natural disaster or emergency, they cannot do the surge pricing that brought them out in droves in the first lace.

Such a huge defeat.

Sp clear that uber struck the deal because they were in fact violating new art state law.

They may not have had a choice.

-- violating new york state law.

Uber has been ruthless with its pricing strategy.

Could you see a broader transportation pricing were created as a result of their tactics?

Certainly you could see that, but the services that are out of compliance with regulation and eight law, let's just be very clear, transportation regulation state law has not been updated for probably 75 years.

We are sort of operating in the 1950's. it matters if it is providing transportation as a utility or simply how we finance the system.

The laws are a patchwork quilt that needs to be updated.

Colorado just passed a law to provide more legislative oversight.

I understand there are a lot of problems there.

They are operating in miami apparently illegally.

The laws need to be updated.

That is the other problem.

If they are, will uber actually be stopped?

What is the reality?

In miami they are still operating when they are not even legal under the current miami laws and regulations.

They have been brazen in their pricing in their ability to come in and operate even when they are not supposed to.

This is an experience that is much better for the consumer than the alternative.

It is much better for the driver than the alternative.

Just because we have these archaic, 1950's laws on the book doesn't mean that we should try and stick with them.

Let's evolve a little bit.

Matt miller on transportation

This text has been automatically generated. It may not be 100% accurate.

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