Of course they'd do that. But at the same time, realize that (a) all fixed-price transportation options will suffer from a shortage of some sort under the strike, be it bus or taxi or space-on-the-roads-in-general, (b) a lot of the higher prices go to pay the drivers, so that more drivers make an effort to work longer and harder to make extra money, (c) Uber's probably taking a loss on each discounted ride, and just hope to make it up with new customers and publicity.

This is, in fact, the free market at its best, and it's not the market's fault or Uber's fault if it's ugly out there. You always have the option not to use it and hail a taxi regularly. Good luck. You'll need it.