Honolulu Lawmakers Pass 'Surge Pricing' Cap For Ride-Hailing Companies (reuters.com)

Honolulu could become the first U.S. city to limit fares ride-hailing companies can charge when demand spikes, following a city council vote on Wednesday, the Honolulu Star-Advertiser newspaper reported. From a report: Ride-hailing companies such as Uber and Lyft use a model known as "surge pricing" in which the fare for a ride rises when factors such as rush hour and bad weather increase demand for the service. The practice could be limited in the future in Hawaii's largest city after the Honolulu City Council approved by a 6-3 vote a bill requiring city officials to cap surge pricing by ride-hailing companies, the newspaper reported. For the bill to become law, however, it still needs to be signed by the Mayor Kirk Caldwell, whose administration appears to oppose the measure, Hawaiinewsnow.com reported.

Comments

Re:It will be interesting to see what happens

[Rei]

I think it's important to assess the social consequences of any given policy. For example, a major sporting effect (where some people drink heavily) can often cause high surge pricing. As has been shown time and time again, the higher the price of alternative modes of transportation, the more likely intoxicated people are to drive.

If surge pricing isn't really turning out "new" supply - if it's just that the existing supply goes idle in off-peak times - then is it actually a good thing to have the price fluctuate dramatically, or would it not be better to level it out?

Great experiment!

[misnohmer]

I for one hope it passes. I'm sure there are many people out there who can theorize what such a cap would do, but nothing beats real world data. So, if it passes, a few years from now if some other city tries to pass such a measure, there will be data to show what actually happened, so people won't end up being labeled as haters for arguing for or against such a law.

Re:Great experiment!

[N1AK]

The UK has considerably increased minimum the minimum wage since it was implemented at £3.60 in 1999 to £7.83 now (notably above inflation) and has seen a decrease in unemployment. I haven't seen any credible analysis yet that shows a clear correlation between minimum wages and unemployment, perhaps you'd like to share some? I assume you must be basing your view on credible and extensive analysis because if you weren't it would be a little hypocritical to claim other people can't argue logically.

Re:Great experiment!

[Anonymous Coward]

The UK also has a massive, undertaxed black economy of common laborers being paid off the books. Tax rates are very high in the UK, for a much higher level of social services such as a genuine universal health care program and much more effective public transit system than the USA has. But it's expensive, and these laborers are *not* paying into it. They're similar to Mexican migrant workers in the USA, but while the UK was part of the EU they were even easier to slip over the border.

I got to know a number of Polish migrant workers in London working on the Olympic construction while I was living in cheap housing as a US IT consultant. Interesting enough men, but they were definitely being paid off the books, and many of their colleagues were basically indentured labor who could not get their passports back from their owners.

Re:Great experiment!

[hwihyw]

An "experiment" that's been tried a thousand times over. Cap prices below market prices and you get a shortage. Cap prices above market prices and you get a surplus. Supply & demand 101, econ 101, common sense 101, operating a lemonade stand 101.

https://en.wikipedia.org/wiki/...
https://www.e-education.psu.ed...