Uber offers refunds after Mexico City pricing spat

The Uber ride-sharing app offered discounts and free rides to Mexico City clients on Friday after they were charged five times normal rates or more during the city's recent pollution alert.

The company said in a statement that it understood riders' "surprise and frustration" and would reimburse clients for any trip they were charged at five times the normal rate or more. Uber said it will offer two free rides worth up to 150 pesos (US$8.50) apiece to customers charged 3.5 to 4.9 times the normal rate.

The app came under fire by users and city officials on Wednesday when the city ordered 40 percent of the city's cars off the road to reduce smog. On normal days, 20 percent of cars can't drive, at least through June.

With more customers and fewer Uber drivers on the road, the company's "dynamic pricing" policy kicked in, raising rates.

The city's mayor, Miguel Angel Mancera, crowed on his Twitter feed that "we reached an agreement to eliminate the dynamic pricing," but the company did not go that far in its statement, saying only "you will no longer see excessive dynamic pricing."

"We are working together with the authorities to find creative solutions that will achieve a balance between demand, efficiency and price during these environmental crises," the company said. "We want to be part of the solution and avoid this happening again."

Uber users are normally advised when rate hikes go into effect.

But Hector Serrano, the head of the city's transport department, said the city government had received over 300 complaints, some from people who claimed they had not been warned about how much their ride would cost. City officials had said they were examining the possibility of new regulations on the company.

Uber said it faced a perfect storm of demand and supply it had never seen before. About two million of the five million cars were ordered off the streets in this megalopolis of 20 million people. It said demand went up by 64 percent on Wednesday, with 40 percent fewer cars.

"This (car-ban) measure took our model to a situation that was difficult to predict, and never before seen in the 400 cities where we operate worldwide," the company said.

Still, it said that 68 percent of users -presumably in off-peak hours - paid normal rates, and that only 4 percent paid three times normal rates or more.