Anytime there is an event that leads to a massive reduction in supply or increase in demand for a resource (in this case transportation), whether because it's New Year's eve or because there is a storm, there needs to be some mechanism to allocate the scarce resource. The best known mechanism for doing this is price. That way if you can wait to travel you wait and if you truly can't wait, you pay up and you get to use the resource (in this case transportation).

If you don't raise the price, people who desperately need whatever it is that there is temporarily a shortage of, may not be able to get it at ANY price because people who don't actually need it are using more than they would at the market clearing price. These users who wouldn't pay up do not receive as much benefit from the resource as those who desperately need it and would pay up. This ultimately leads to a reduction in the overall benefit that accrues to society as a whole.

What Uber did here is absolutely the "right" thing. Ultimately the problem is a scarcity of whatever the resource is. If you don't raise the price, you still have to allocate it and you can't just allocate it based on some arbitrary "need". The fundamental reason communism/socialism always fails is because a you can't ever truly judge how much someone else "needs" something. By asking people to pay up or not you make them evaluate the intensity of their own "need" while at the same time creating strong incentives for people to find substitutes, do without and for producers to produce more.