City Coun­cil crit­i­cizes Uber, Lyft for higher prices at peak hours

Honolulu Star-Advertiser - - BUSINESS REPORT - By Allison Schae­fers as­chae­fers@starad­ver­

Ride-hail­ing com­pa­nies such as Uber and Lyft say ad­just­ing ride prices based on sup­ply and de­mand, also known as surge pric­ing, helps cus­tomers get rides quickly.

Higher prices dur­ing peak times, such as Fri­day and Satur­day nights, en­cour­age more driv­ers to work those hours, mak­ing more cars avail­able.

But the prac­tice drew crit­i­cism dur­ing a Honolulu City Coun­cil bud­get com­mit­tee hear­ing Wed­nes­day to dis­cuss Bill 35, which re­stricts taxi­cabs and ride-hail­ing ser­vices on is­sues like surge pric­ing, bag­gage fees, in­surance and se­cu­rity.

Robert Deluze, owner of Roberts Taxis, said Uber and Lyft re­cently em­ployed surge pric­ing dur­ing pick­ups for military mem­bers com­ing off the USS Theodore Roo­sevelt and the USS Bon­homme Richard. When ride-hail­ing surge pric­ing was in ef­fect on Fri­day, military mem­bers paid as much as $221 to get from Pearl Har­bor to Waikiki, he said. Those who took taxi­cabs, where a max­i­mum me­ter rate is set by the city, typ­i­cally paid $44 or less, he said.

Price vari­a­tion was a key rea­son that com­mit­tee mem­bers ad­vanced the bill. Ef­forts to ad­just trans­porta­tion reg­u­la­tions to cover ride-hail­ing com­pa­nies have in­ten­si­fied over the last sev­eral years, but so far, the city has yet to pro­vide a set of new reg­u­la­tions that sat­is­fies all par­ties. Bill 35 still needs ap­proval from a com­mit­tee, the full Coun­cil and the mayor be­fore be­com­ing law.

Honolulu City Coun­cil chair­man Ernie Martin said he looks for­ward to “pass­ing this bill sooner rather than later.”

City Coun­cil­woman Kym­berly Pine, whose Navy hus­band makes fre­quent de­ploy­ments, also sup­ported the bill. While the leg­is­la­tion pro­poses a wide-rang­ing set of new reg­u­la­tions, Pine fo­cused on surge pric­ing.

“Uber and Lyft have preyed on the des­per­a­tion of our ser­vice mem­bers and I just find this dis­gust­ing,” Pine said dur­ing the hear­ing. “This is why I sup­port this bill even more than I did be­fore. I just want to pass this now, go straight to third read­ing.”

Pine didn’t stop there, though. Now, she’s urg­ing res­i­dents and ser­vice mem­bers to boy­cott Uber or Lyft un­til they come up with a new com­pany policy that ends “preda­tory pric­ing” on military mem­bers.

Tabitha Chow, se­nior op­er­a­tions man­ager for Uber in Hawaii, said an al­go­rithm on The Honolulu City Coun­cil on Wed­nes­day dis­cussed Bill 35, which would re­strict taxi­cabs, and ride­hail­ing ser­vices’ so-called surge pric­ing and address other is­sues. Bill 35 is be­ing sup­ported by taxi­cab com­pa­nies such as The Cab, Charley’s Taxi, Eco Cab and Robert’s Taxi.

Uber’s app prices rides. Chow did not deny the va­lid­ity of the surge rates that military mem­bers were charged, but said they were likely “edge cases.”

Wes Shields, who is in the Navy and drives for Uber part-time, said Uber of­fers af­ford­able rides “99.9 per­cent of the time.” Shields said prices may rise tem­po­rar­ily

to at­tract enough driv­ers to han­dle a car­rier strike group, but riders know the cost up front and could choose to wait for costs to nor­mal­ize.

“I ac­tu­ally ride Uber more than I drive for them. There are times that I might be will­ing to pay more. Maybe if I only have 8 hours of free­dom, me and my five bud­dies might be will­ing to share a higher-cost ride,” Shields said.

Bill 35 was sup­ported by taxi­cab com­pa­nies, in­clud­ing The Cab, Charley’s Taxi, Eco Cab and Robert’s Taxi. How­ever, Nathan Ham­b­ley, Uber spokesman for Hawaii, said Bill 35 would force Uber and its driv­ers into an out­dated taxi­cab busi­ness model.

“The reg­u­la­tions it pro­poses would limit the abil­ity of thou­sands of is­land driv­ers to use rideshare plat­forms to make money. It would also likely make rideshar­ing on Oahu less af­ford­able, less con­ve­nient and less re­li­able,” Ham­b­ley said in a state­ment. “Rather than sup­port Bill 35, The Honolulu City Coun­cil should keep Hawaii mov­ing for­ward by elim­i­nat­ing out­dated taxi reg­u­la­tions and main­tain the abil­ity of thou­sands of lo­cals to drive and ride via the Uber plat­form.”

Uber re­ported 124,000 cus­tomers used its ser­vice in Hawaii in March, with some 100,000 of them on Oahu. Uber said its driv­ers in Hawaii earned $40 mil­lion in 2017.



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