This is the same company that tried to eliminate its competition by ordering cars and canceling them at the last moment. I like their product enough, but their business practice track record suggests that they are not on the up and up.
Particularly in NYC where surge isn't just long events like New Year's - surge kicks in during half hour rainstorms as well. I highly doubt there's any significant supply change in that kind of time frame - in which case Uber is simply price gouging without any of the claimed positive supply effect.
Surge pricing also encourages uber drivers (who decide their own hours) that are about to end their shift to end a bit later to take advantage of the surge.
Market reality and what looks great on paper are often two very separate things - we in startups should know this better than anyone else.
How many extra cars get on the road during these short surge events? Is it worth charging everyone 2X if it brings an extra 1% of supply? 5%?
One thing you get used to after dealing with startups for a while is to listen to what they're not saying as well as what they're saying. Uber, along with all other "sharing economy" startups, like to trumpet their social-good side (see: AirBnb and the "helping poor New Yorkers pay rent" narrative). The fact that they've released nothing even remotely resembling data regarding the supply-boosting effects of surge pricing is suspicious. My suspicion is that the effect is not substantial unless during extended surge events (say, New Year's), certainly not substantial enough to placate people looking at 2X, even 3X fares.
For all that I know however, they are dispatching more, but given the uproar it would appear that they are not.
Want more drivers on 4th July do get drunk people home from bars? Guess what - a lot of potential drivers just got shitfaced at bars themselves.
Presto! More cars on the street!
See also: lifting yourself by your own bootstraps.