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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. Read more

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 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.