Hurricane Irma Causes Price Gouging Accusations against Airlines, Gas Stations and Retail Stores
By David Hubler and James Thompson
Contributors, EDM Digest
As Hurricane Irma descends on Florida’s south coast and officials scramble to convince residents in the storm path to leave, many would-be evacuees, families or friends have reported incidents of price gouging by airlines, gas stations and retailers.
Former Southern Florida resident Leigh Dow, the CEO at 48 West Agency in Phoenix, was helping a friend struggling to secure one-way airfare through an online site. They sought to evacuate the friend’s daughter out of Miami midweek, when airline prices began skyrocketing before their eyes.
“I screenshot it and put it up on Twitter, and I thought I was having this unique experience,” Dow said in an EDM Digest interview. Very quickly, she learned through her social network about the magnitude of other evacuees experiencing the same problem with other airlines.
Dow added, “Obviously, the airline’s algorithms were jacking up all the prices—there’s no common sense here. No one is looking at how do we get these people (evacuated) out of Florida? Basically, it’s still all about the dollar.”
Delta responded to her tweet. She was then able to find an affordable flight for her friend’s daughter.
Snopes.com, an online fact-finding site, reported that a search for flights out of Miami on a third-party site that lists prices available through travel retailers showed high prices. For example, United Airlines round-trip flights from Miami to Los Angeles beginning on September 8 were priced as high as $2,014.
Some Airline Ticket Prices Rose to over $3,000
Earlier in the week, tickets for domestic flights from South Florida skyrocketed to more than $3,000 per person. Those seats would ordinarily cost a fraction of the price, the Miami Herald said. September is normally one of the slowest times of the year for air travel.
One traveler tweeted, “Totally unacceptable, a $358 flight from Miami to NYC went up to $3,578. Why should expect anything decent from these airlines???”
Another Twitter user noted that airfare from Miami to Newark, NJ, was a whopping $2,000.
Price Gouging Blamed on Computer Algorithms
“Last-minute fares are often more expensive in general,” said Georgia Hobica, founder of the website Airfarewatchdog.
“It’s just the computer programs doing what they do when it’s last minute and seats are scarce. If there’s any gouge, it’s just the last minute walk-up airfares that are designed for desperate business fliers,” Hobica explained.
Some Gas Station Owners Also Blamed for Price Gouging
The issue wasn’t isolated to airlines. According to Dow, “Reports were coming in that gas station owners are putting bags over (pumps)—everything but the premium gas, to make people buy the most expensive gas, they know they’ll be fined if they price gouge.”
The State of Florida has enhanced regulations governing pricing practices major storm events, bolstered by a Price Gouging Hotline. But public safety officials routinely encounter the challenges of residents choosing to wait out deadly storms, putting both residents and first responders at greater risk.
Instances of price gouging can make the “stay-and-wait-it-out” decision more appealing and practical. For many, it comes down to simple economics and the high cost of evacuating.
Dow said to EDM Digest, “I knew family that went through Katrina, my family went through Andrew – it’s expensive to leave. You have to have a car. You need gas. You have to be able to carry gas in your car because you have to be on the highway for 9 to 12 hours. You have to be able to afford a plane ticket, bus ticket, food. You have to be able to afford to lose wages while you’re paying for all those things.”
“You have this really dangerous storm coming, and all these people are trying to do the right and responsible thing to leave so they don’t put other people’s lives in danger, like first responders, and it makes it so hard with all these added obstacles.”
Airline Price Caps Expected to Stay
As Irma makes landfall in Florida early Saturday morning, Dow credits Delta and other airlines for addressing the airfare pricing issue head on and placing price caps on flights leaving the state.
On Thursday, Jet Blue capped its direct-flight fares at $99, including all fees and taxes. Fares for connecting flights will be no higher than $159, Time Money reported. The offer is good for any available seat through September 13.
Delta Airlines capped its fares at $399.
Will Social Outcry Mitigate Gouging and Drive New Policy?
Claims of price gouging during state emergencies aren’t unprecedented. But now with more mobile- and social network-empowered citizens willing to report infractions, there’s a growing chorus of online images and personal stories that are prompting business leaders to adapt corrective policies faster.
The next step is ensuring price gouging, or even an appearance of it, doesn’t happen in the first place. With three active hurricanes moving through the Atlantic and Gulf of Mexico – following the record-setting devastation of Hurricane Harvey on Texas and Louisiana – more proactive and lasting pricing measures are expected from airlines and retailers.