IRMA and price gouging

[AVB]

Originally Posted By: Nickdfresh
Originally Posted By: AVB
I have seen places that do charge for putting out house fires.


If they don't pay the bill, does the rest of the neighborhood burn down too?
I guess that depends on whether the rest of the neighborhood paid for fire services.

 

[Nickdfresh]

Originally Posted By: AVB
Originally Posted By: Nickdfresh
Originally Posted By: AVB
I have seen places that do charge for putting out house fires.


If they don't pay the bill, does the rest of the neighborhood burn down too?
I guess that depends on whether the rest of the neighborhood paid for fire services.


Touche!

 

[bioburner]

My bill for the basement savers union arrived after the fire. I would have paid them to just leave for all the grief and cleanup costs for what was left.
Yes there are areas you pay for fire coverage before a fire so they don't break out the hot dogs and marshmallows if the house catches fire.

 

[Andrew1972]

Originally Posted By: Claud
A very different culture to Europe, After the recent terrorist attacks taxi drivers, food outlets and hotels were offering their products and services for free to the victims and rescue services.

Better lobby your senators and congressmen to make sure no Federal aid is provided.

Claud.


The terrorist events though in comparison are micro in terms of folks directly effected. So it is easier to manage the free users of services. Hurricane is a macro event in terms of people so doing something free would over run your business.

There are many examples of free services in Tx and likely Fl to come.

 

[y_p_w]

Typically, price-gouging laws require a declaration of emergency. However, the Governor of Alabama did declare a state of emergency with regards to Irma, so yeah they might have some explaining to do. If anyone can show that the price had jumped 25%, the state can stick it to the retailer or hotel with a fine of up to $1000 per incident and $25,000 per day.

http://www.al.com/news/index.ssf/2017/09/alabama_gov_kay_ivey_issues_ex.html
http://www.al.com/news/birmingham/index.ssf/2017/09/alabama_ag_warns_against_price.html
http://ago.alabama.gov/Update-246

This is the law. It can only be enforced by the state via fines.

Quote:
http://adeca.alabama.gov/Divisions/ltcr/Resources/Alabama Anti-Price Gouging Law.pdf

Section 8-31-3
Prohibition of unconscionable pricing during declared state of emergency.

It is unlawful and a violation of Section 8-19-5, for any person to impose unconscionable prices for the sale or rental of any commodity or rental facility during the period of a declared state of emergency.
(Acts 1996, No. 96-171, p. 195, §3.)

Section 8-31-4
Determination of unconscionable price during a state of emergency.

It is prima facie evidence that a price is unconscionable if any person, during a state of emergency declared pursuant to the powers granted to the Governor in Section 31-9-8, charges a price that exceeds, by an amount equal to or in excess of twenty-five percent the average price at which the same or similar commodity or rental facility was obtainable in the affected area during the last 30 days immediately prior to the declared state of emergency and the increase in the price charged is not attributable to reasonable costs incurred in connection with the rental or sale of the commodity.
(Acts 1996, No. 96-171, p. 195, §4; Act 2001-1104, 4th Sp. Sess., p. 1168, §1; Act 2003-336, p. 843, §1.)

Section 8-31-5
Penalties for violation of chapter; penalties collected remitted to State Treasurer; suspension or revocation of license or certificate.

(a) Upon an entry of judgement or decree for a violation of this chapter, the court shall impose a civil penalty not to exceed one thousand dollars ($1,000) per violation with an aggregate total not to exceed twenty-five thousand dollars ($25,000) for any 24-hour period.
(b) All penalties collected under this chapter shall be remitted by the circuit court to the State Treasurer and shall be credited to the account of either the office of the Attorney General or the office of the district attorney whichever initiated the action resulting in the imposition of such penalties.
(c) Upon a showing to the court by the office of the Attorney General or the office of the district attorney that a person has engaged in continuous and willful violations of this chapter, the court may suspend or revoke any license or certificate authorizing that person to engage in business in this state or the court may enjoin any person from engaging in business in this state.
(Acts 1996, No. 96-171, p. 195, §5.)

Section 8-31-6
Private cause of action not created.

Nothing in this chapter creates a private cause of action in favor of any person damaged by a violation of this chapter.
(Acts 1996, No. 96-171, p. 195, §6.)

 

[philipp10]

Originally Posted By: AirgunSavant
Sorry I'm an American first and a capitalist a distant second.
No excuse for screwing the needy!


I am too and would never want to profit from someones misfortune. But the fact of the matter is, the more the price rises for a given good, the more likely the supply will rise with it. Example, if motels in Atlanta were to go up 500% during a hurricane, don't you think some people MIGHT be willing to open up their homes for rent? And wouldn't that then increase the supply of available rooms? Think of it this way, the number of rooms is finite, and in short supply... until.....the price rises. If the price does not rise people will be sleeping in their cars or driving further north for rooms.

 

[y_p_w]

Originally Posted By: madRiver
The price of hotel is set by a complex computer model of demand on rooms vs price. As the rooms are less available price goes up(e.g. Midweek). The street price of walking in may not resemble the computer pricing.


During a state of emergency they would probably need to suspend that price model if it might result in price-gouging under the law.

 

[y_p_w]

Originally Posted By: philipp10
Originally Posted By: AirgunSavant
Sorry I'm an American first and a capitalist a distant second.
No excuse for screwing the needy!


I am too and would never want to profit from someones misfortune. But the fact of the matter is, the more the price rises for a given good, the more likely the supply will rise with it. Example, if motels in Atlanta were to go up 500% during a hurricane, don't you think some people MIGHT be willing to open up their homes for rent? And wouldn't that then increase the supply of available rooms? Think of it this way, the number of rooms is finite, and in short supply... until.....the price rises. If the price does not rise people will be sleeping in their cars or driving further north for rooms.

The law basically requires the retailer/hotel/etc to suspend normal supply and demand calculations. I don't know how it would change the dynamic for personal homes, but there's a clear cap of 25% for existing businesses.

 

[philipp10]

Originally Posted By: y_p_w
Originally Posted By: philipp10
Originally Posted By: AirgunSavant
Sorry I'm an American first and a capitalist a distant second.
No excuse for screwing the needy!


I am too and would never want to profit from someones misfortune. But the fact of the matter is, the more the price rises for a given good, the more likely the supply will rise with it. Example, if motels in Atlanta were to go up 500% during a hurricane, don't you think some people MIGHT be willing to open up their homes for rent? And wouldn't that then increase the supply of available rooms? Think of it this way, the number of rooms is finite, and in short supply... until.....the price rises. If the price does not rise people will be sleeping in their cars or driving further north for rooms.

The law basically requires the retailer/hotel/etc to suspend normal supply and demand calculations. I don't know how it would change the dynamic for personal homes, but there's a clear cap of 25% for existing businesses.


well the law needs to change holding prices never created MORE supply...which is obviously short when 4 million Floridians invade Georgia. Simple supply and demand.

 

[stockrex]

No words for what some businesses like the Mobile, AL Marriott is doing to these poor folks.

I was talking a submarine guy from FL last night, he and his wife were pretty [censored] cuz of how they were treated when they checked in by get this, the General Manager at the front desk.

Yes, I have paid $300 plus a night for a room, some of the nice locations have much higher peak time rates say when UN comes to town in NYC, rates top $1000 a night.
But this is not NYC, this is not the Ritz, it is one of the most run down Marriott I have seen in a long time.

Good find on the anti-gouging law and Gov declaring SOE for IRMA, I will keep a copy of my bill and get a few from others and file a formal complaint with State AG, I am sure AG can subpoena last few months of weekend rate paid by guests.

On a positive note rest of the hotel staff are very very nice and are going out of their way to help these displaced families. Kudos!

 

[fdcg27]

I'd be more than happy to pay $189.00 a night for a place in which me and my weary family could grab a shower, a meal and then rest our bodies on nice clean sheets were we fleeing a natural disaster.
This isn't gouging at all.
The real gouging is mostly found in the informal sector, with nobody to be found to prosecute.
If you were desperate enough, you'd gladly give me fifty bucks cash for five gallons of E10 or a case of bottled water.
That's gouging.

 

[Coprolite]

Hotels in many jurisdictions had to post their rack rate in each room. This would be the ceiling that would almost never get charged, as they would usually give 10-80% discount depending on occupancy and competition. They were required to post the rates to prevent gouging...

189 isn't gouging for a Marriott. 6.89 is gouging for regular gas when it was 1/3rd of that before...and it didn't go up everywhere

 

[y_p_w]

Originally Posted By: philipp10
Originally Posted By: y_p_w
Originally Posted By: philipp10
Originally Posted By: AirgunSavant
Sorry I'm an American first and a capitalist a distant second.
No excuse for screwing the needy!


I am too and would never want to profit from someones misfortune. But the fact of the matter is, the more the price rises for a given good, the more likely the supply will rise with it. Example, if motels in Atlanta were to go up 500% during a hurricane, don't you think some people MIGHT be willing to open up their homes for rent? And wouldn't that then increase the supply of available rooms? Think of it this way, the number of rooms is finite, and in short supply... until.....the price rises. If the price does not rise people will be sleeping in their cars or driving further north for rooms.

The law basically requires the retailer/hotel/etc to suspend normal supply and demand calculations. I don't know how it would change the dynamic for personal homes, but there's a clear cap of 25% for existing businesses.


well the law needs to change holding prices never created MORE supply...which is obviously short when 4 million Floridians invade Georgia. Simple supply and demand.

When there's a state of emergency the Governor can essentially throw out supply. I know it doesn't create any more supply, but the idea is that those who can find supplies or services don't feel like they've been taken advantage of because they're in a situation where they have few or no choices. And the Governor of Georgia has declared an emergency, and Georgia has a price-gouging law.

Quote:
http://www.consumer.ga.gov/consumer-topics/price-gouging

Price Gouging

Although competition and demand drive prices in our free-market economy, during a declared state of emergency the Governor may prohibit price increases on items that he considers to be “necessary” to preserve, protect, or sustain the life, health, or safety of persons or their property. The Governor must identify the specific goods and services to which the “price gouging” law applies. Price increases on the products and services specified by the Governor are only permitted if they accurately reflect an increase in the cost of new stock or the cost to transport it, plus the retailer's average markup percentage applied during the ten days immediately prior to the declaration of a state of emergency.

The Governor can declare a state of emergency in response to, or in anticipation of, a natural disaster or a national security emergency. All counties in the state are covered, unless the executive order declaring the emergency is limited geographically to certain counties. The Georgia Department of Law's Consumer Protection Unit has the authority to investigate allegations of price gouging. Violators can be fined from $2,000 to $15,000 per violation.

 

[y_p_w]

Originally Posted By: Coprolite
Hotels in many jurisdictions had to post their rack rate in each room. This would be the ceiling that would almost never get charged, as they would usually give 10-80% discount depending on occupancy and competition. They were required to post the rates to prevent gouging...

189 isn't gouging for a Marriott. 6.89 is gouging for regular gas when it was 1/3rd of that before...and it didn't go up everywhere

Depends on any number of things. I've stayed in Vegas in a hotel for $50 a night and looked on the rack rate posted on the back of the door. It was something like $600, and likely reflected New Year's Eve rates. I do remember going on business to a huge tech convention, and the hotels were charging a lot more than most leisure rates (maybe $350/night) and were requiring entire weeks to be booked. The card dealers seemed to hate it because "computer nerds don't play a lot".

I've seen rack rates that didn't even seem that high. It might have been a difference in law, where I think it would have been legal to go higher than that rate.

However, the law is what's going to decide. A lot of these laws are kind of vague, but often you know it's gouging when you see it, and it's up to a judge to decide. Many laws are based on the average prices leading up to the declaration of emergency, and it may even be retroactive even if a reservation was made before the declaration. So if they were charging an average of $100 a night for a standard room in the past month and they're now charging $200 a night, that would seem to be over the 25% threshold in Alabama.

 

[philipp10]

So stopping the price from rising doesn't increase the supply and just allows the people that thought ahead to get a room. Anyone showing up late....well too bad for you. Sometimes Americans sure love socialism/communism...when capitalism doesn't benefit them.

 

[MNgopher]

So, assuming the price gouging law applies, then the price increase is capped at 25% more than what was being charged in the previous 30 days. Since I can't go back 30 days, I did go forward 30 + days to see what the lowest discounted price available is and took the average.

To raise the price 25% (the maximum potentially allowed) to reach $189 a night, the average would have had to have been 151.20 per night. My average for the next 30 days where the room was actually available using the lowest cost room (ie: prepaid, non-refundable, booked multiple days in advance and meets eligibility requirements) is $123.75 a night.

That being said, that assumes that all the rooms rented met every prepaid non refundable requirement, and I think we can all agree that that does not reflect reality with walkups, other negotiated rates, etc... - meaning the average would likely be higher than the full discount rooms. Is that more than $28 a night? No idea, but quite frankly I wish you luck in proving somehow they were 25% over their average room price from the preceeding 30 days...

Again, in my opinion, we are looking very hard to be offended here.

 

[Dallas69]

Sure there's a difference between a special event and a disaster.

 

[y_p_w]

Originally Posted By: philipp10
So stopping the price from rising doesn't increase the supply and just allows the people that thought ahead to get a room. Anyone showing up late....well too bad for you. Sometimes Americans sure love socialism/communism...when capitalism doesn't benefit them.

It's unabashedly a price control in case of a state of emergency. Most of these laws can be bypassed if there's known "reasonable cost" that makes it more expensive to provide the good or service. If the commodity price of gasoline has clearly gone up, it's not as if fuel retailers will be forced to sell it at a loss.

 

[4WD]

Well, I came from a poor family - but pushed a lawn mower as a skinny kid and changed oil/pumped gas at an Exxon station at 14. Been working nonstop for four decades. Hard labor to advancement to supervisor and management positions - and always trying to out work and out deliver my peer group. Now I can help others physically and with money - I live beneath my means so that I can do that and still manage ups and downs.
So in times of need I'm going to spend whatever it takes to keep my family safe and secure. That includes elevation of prices? - Ok, call it whatever you like.
So even though I donated to these efforts (many times) - I also know lots of folks can't help themselves because they spent too many years being lazy ... they can go to public shelters - I'm heading away from it all to an overpriced hotel. Once when we could not find one - my wife found a weekend cottage on Facebook - asked a lady if she rents it. She said no - but if you are displaced by the storm I will. We rented it. Only downside was I swear her stuffed cat was staring at me

 

[bbhero]

The "cause" whether it wanting to go to a big game or a storm comes.... does not matter at all Nick... Doesn't matter. Period. End of story. Whether people are doing it for fun or necessity... It doesn't matter. Again... If prices were $275, $300, $400 vs $80.... I would agree and buy in. I would call that excessive and truly taking FAR too much advantage of people. At $189 vs regular price of $89... That's not worthy of being all upset about it. That price of $189 when there's a very large scale increase of customers makes sense to me. It is not excessive.