New bill caps surge pricing on ride sharing companies

The City Council vote was six to three in favor of passing Bill 35. It adds new regulations for ride share companies.

Bill 35 would put a cap on surge pricing. This means that ride sharing companies won’t be able to charge beyond standard rates for a ride.

Companies like Uber and Lyft currently increase prices, known as surge pricing, during times when the demand for rides is higher.

Council Chair Ernie Martin wrote the bill. 

“You know given that the transportation network companies provide a similar service, I think we believe, I believe it is only fair that we level the playing field so both entities will have an equal chance to survive in Honolulu,” Martin explained.

A spokesperson for Uber said that surge pricing is necessary for their business.

“Surge pricing really ensures reliability for riders. It’s so that you can get a ride whenever you need one and usually very quickly,” Tabatha Chow, Uber Hawaii Senior Operations Manager, said.

Robert Deluze of Robert’s Taxi said the changes are fair.

“The consumer should be protected by capping the price, it’s fair to everybody, mainly the consumer, the taxi drivers and the Uber drivers,” Deluze said.

KHON asked whether Uber will continue operations despite the bill passing. 

“This bill completely breaks our business model and we would have to evaluate whether or not we can continue in Honolulu,” Chow said.

Uber may not be in favor of the change, but customer Simon Ellerbush said he welcomes it.

“As someone who uses the service, I like it. I mean it definitely benefits me,” Ellerbush said. “I remember one time I was coming from Kaneohe to Honolulu and the bus was taking forever and the surge pricing was like $75.”

Chris Hilario also uses ride sharing services and agreed that the cap would benefit customers, but added that it could be bad for drivers.

“If I were a driver, I’d definitely be against that…so it has its downfall as well,” Hilario said.

Bill 35 now goes to the Mayor’s desk. KHON will follow up to let you know if it passes.

To read City Council Bill 35, click here.