Honolulu leaders planned to vote Wednesday on a measure limiting prices that ride-hailing services like Uber and Lyft can charge during peak demand, a cap that the companies say would be the first restriction of its kind in the United States.
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The measure would prevent “surge pricing” if increased rates are higher than the maximum fare set by the city. Uber sent emails to customers across the island of Oahu, which is where the rule would apply, urging them to oppose the rules that would impose “outdated taxi-style requirements on rideshare.”
Oahu taxi drivers have been at odds with those who drive for mobile apps that connect riders with nearby drivers. Taxi companies complain that companies such as Uber and Lyft create an unfair playing field because they face fewer restrictions.
David Jung, owner of EcoCab Hawaii wrote in testimony supporting the measure that it’s wrong to allow companies to set prices without city control.
Robert Deluze, owner of Roberts Taxis, said Uber and Lyft used surge pricing during pickups for military members coming off the USS Theodore Roosevelt and the USS Bonhomme Richard, the Honolulu Star-Advertiser reported last month. Military members paid as much as $221 to get from Pearl Harbor to Waikiki, he said, while the maximum taxi meter rate was $44 or less.
In a fact sheet, Uber said surge pricing gives drivers the incentive to work in busier areas, which lowers wait times for riders and ensures reliability.
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Riders and drivers who submitted testimony opposing the measure said taxis aren’t as reliable or affordable as ride-hailing companies.
Uber driver Lisa Gonzales wrote that she drives to help support her family of six. During surge pricing, passengers have the option to accept or reject costs.
“There is a need for more drivers in one area causing the price to increase during a certain time, or they can wait for the price to decrease when the need for drivers lessens,” she wrote. “It is based on supply and demand. Mostly, what the consumer wants to pay.”
Uber and Lyft officials testified in City Council committees last month that the cap on surge pricing would be the first such restriction on the companies in the country, the Honolulu newspaper reported.
Tabatha Chow, Uber’s senior operations manager for Hawaii, would likely be testifying Wednesday, a spokesman said in an email.
“When demand for rides is greater than the number of drivers on the road, passengers may pay an extra percentage on top of the base ride amount,” Lyft said in a statement explaining its “Prime Time” pricing.
A $6 ride would become a $9 ride during Prime Time pricing of 50 percent, the statement said, adding that it “only adds a percentage to the ride subtotal, which is calculated before any other fees or additional amounts.”
Council Chairman Ernie Martin said he wrote the measure to ensure consumers won’t pay an “unreasonable price.” He said companies will still be able to employ surge pricing — or as he prefers to call it, “predatory pricing” — within limits.
If council members approve the measure, city attorneys will review it before it goes to the mayor. Mayor Kirk Caldwell would have 10 days to sign it into law, allow it to become law without his signature or veto it.
