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Honolulu places cap on surge charging for ride-sharing companies

Honolulu places cap on surge charging for ride-sharing companies

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Illustration by Alex Castro / The Verge

Honolulu approved a measure yesterday that will place a cap on how much ride-sharing services like Uber and Lyft can charge with surge pricing, as reported by the Associated Press.

Per the measure, Honolulu’s Department of Customer Services will set a maximum price, and then surge pricing would be prevented if the increased rate exceeds that number. The measure still has to be reviewed by attorneys and then will go before the city’s mayor, who will have 10 days to decide whether it should become law. If approved, this would be the first limit of its kind in the United States.

In response to the measure, Uber sent emails to customers on Oahu telling them to oppose what it called rules that would mimic “outdated taxi-style requirements on rideshare.” The company argues that surge pricing is based on supply and demand, and also stated in a fact sheet that surge pricing encourages drivers to work in busier areas, thus lowering wait times for riders.

According to the Associated Press, council chairman Ernie Martin called Uber’s surge policy “predatory pricing” and said Uber will still be able to employ surge charges, but within limits to ensure people don’t pay an “unreasonable price.”