Ride-hailing apps face price caps under City Council plan

(Image: Hawaii News Now)
(Image: Hawaii News Now)
Updated: May. 23, 2018 at 5:34 PM HST
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HONOLULU (HawaiiNewsNow) - There was more spirited debate over the future of ride-hailing apps Wednesday at the Honolulu City Council.

The council Budget Committee heard from more than 30 drivers, company executives and consumers as they looked at whether to keep proposed regulations alive.

Council members and the city administration are highly focused on pricing policies.

Taxi drivers and company owners said the app-managed companies, like Uber and Lyft, are cutting more and more into their business by charging significantly less than traditional cabs during normal times.  Meanwhile, during peak times, like when Navy ships bring thousands of service members to Pearl Harbor, the apps raise rates because they say that will encourage more drivers to serve the crowd.

In a testy exchange with Uber executive Tabatha Chow, Councilwoman  Kymberly Pine accused Uber of predatory pricing — designed to force competition out of business to create a near monopoly for Uber and Lyft.

Chow defended the pricing as good for consumers saying, "Uber or Lyft is 40 percent cheaper than a taxi."

Pine interrupted her: "So you are doing predatory pricing then."

"I don't understand how that is predatory pricing," Chow responded. "We want to offer an alternative to people. Honolulu has the highest taxi prices in the nation right now; no way are consumers winning in that situation."

"I don't think that's a true statement," Pine said. She said she has repeatedly asked Uber for data on pricing, which she said have been provided.

The committee agreed to keep alive a proposal that, among other new regulations, would cap ride-hailing prices at no more than what cabs can charge. Council Chairman Ernie Martin, who authored the most recent proposal, said he would attempt to work out more details of amendments to Bill 35 (2018) before it comes to the full council for a final vote.

Chow repeatedly defended the Uber pricing system, which she said council members don't seem to understand and has been the target of a misinformation campaign by Taxi companies.

She said a widely-cited charge of over $200 for a ride from Pearl Harbor to Waikiki was not actually accepted by the consumer, and was for a premium service and not what would be charged by a typical Uber.

Chow also pointed out that the Uber app alerts potential riders to above-normal fares and the customer must agree to the price before they accept the ride.

She said the surge price is recalculated by the program every two minutes, so people willing to wait could get a lower fare.  She also said customers who don't want to pay the surge fares can always arrange for a taxi.

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