Is surge pricing legal during emergencies?

Short answer: In the United States, surge pricing during emergencies, often called price gouging, is illegal in many states. Most states have laws prohibiting excessive price increases on necessities like food, water, gas, and lodging after a declared emergency.

Price Gouging Laws During Emergencies

Price gouging refers to the practice of increasing prices of essential goods and services to an unreasonable or excessive level during a declared emergency or disaster [S1]. While the term "surge pricing" is often used by companies to describe dynamic pricing based on demand, when applied during emergencies to necessities, it can fall under illegal price gouging statutes [S2].

There is no federal law against price gouging in the U.S. [S3]. Instead, price gouging laws are enacted at the state level [S3]. Currently, 39 states, Puerto Rico, and the District of Columbia have statutes or regulations defining and prohibiting price gouging, especially after a state of emergency has been declared by the governor or president [S4]. New York's anti-price gouging statute, for example, makes it illegal to sell goods or services critical to public health, safety, or welfare for an "unconscionably excessive price" during abnormal market disruptions, including emergencies [S5]. Florida's law prohibits unconscionable prices for essential commodities, dwelling units, or self-storage facilities during a declared state of emergency [S6].

What constitutes an "unconscionably excessive price" can vary by state, but generally involves a significant increase over the price charged immediately before the emergency [S7]. For instance, some state laws specify a percentage increase, such as 10% [S8] or 25% [S9], as a threshold for a presumption of price gouging, unless the seller can prove increased costs [S9]. These laws typically apply to essential items like food, water, ice, gasoline, batteries, generators, and services such as construction, repair, and lodging [S10].

States without specific price gouging statutes may still address such practices under broader unfair and deceptive acts and practices (UDAP) laws [S4]. Enforcement of these laws is usually handled by the state Attorney General's office [S1].

What to do:

Sources

  1. Price Gouging: What It Is, How to Avoid It, and Where to Report It
  2. Surge Pricing During Emergencies: When Does It Become Price Gouging?
  3. Price Gouging: What You Need to Know
  4. State Price Gouging Laws Summary
  5. New York State Price Gouging Statutes
  6. Florida's Price Gouging Law
  7. Understanding Price Gouging - Nolo
  8. California Price Gouging Law
  9. Texas Price Gouging Law
  10. What Items Are Covered by Price Gouging Laws?

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