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Honolulu Caps Price Surges for Uber and Lyft

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If you’ve ever had to call an Uber or Lyft during peak hours, you know how expensive it can get. A short ride from downtown to the edge of the city can cost you hundreds of dollars during peak hours, especially on a weekend or holiday.

Honolulu is no stranger to high fares. In fact, the city has one of the highest taxi prices in the United States. But officials in the area are trying to prevent ride-sharing services like Uber and Lyft from scamming customers out of their hard-earned money, especially military personnel, during those pricey peak hours with a new surge cap.

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Concern about the surges began when councilwoman Kymberly Marcos Pine found out U.S. Navy sailors were being charged astronomical rates to get to Waikiki upon arriving in Pearl Harbor — $221 to travel just 10 miles, compared to $44 for a cab ride. Uber and Lyft are known to raise their rates by as much as 50 percent during peak hours. Last week, the Honolulu City Council approved regulations placing a cap on price surges for ride-sharing services.

Unsurprisingly, Uber and Lyft publicly expressed their concerns about these new regulations, reaching out to local customers and asking them to speak up as well. In a statement, Lyft explained that price surging simply follows the principles of supply and demand; prices surge when there are more ride requests than Lyft drivers on the road. Uber argued that price surges are transparent — you can see the price of your ride before you order it — so customers aren’t being unfairly roped into any charges.

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Ernie Martin, Council Chairman, explained that this cap is not to eliminate Uber and Lyft’s ability to change its prices according to demand. He explained that the goal is to eliminate “predatory pricing” that charges customers an “unreasonable price.” Ride-sharing companies can still raise their prices during peak hours, just not above a certain threshold. Uber responded to the decision in a statement noting that, if the regulations are put into place, Uber services on Oahu may come to an end.

Next, the bill lands on Mayor Kirk Caldwell’s desk for approval or veto within the next 10 days.

News Sources: Associated Press, Los Angeles Times, USA Today, Reuters