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

Supply and demand

[Anonymous Coward]

Let's repeal that pesky law of supply and demand.

Re: Supply and demand

[saloomy]

Any economist worth his salt knows how to create a shortage. Fix prices. If you cap surge prices, drivers won't want to deal with all the drunks at 2 am or after the game lets out. This will result in a shortage of drivers. Sure, some people would be happy to pay them more so they could have the convenience, but the government won't let them. Shitty....

Re: Supply and demand

[cayenne8]

I live in cleveland. After the parade for the Cavs after they first one the championship a trip that would cost $10 was $50

I've seen this happen from time to time here in New Orleans.

There's always something going on here, but I don't see it as a big deal.

I've been dining and drinking downtown and was about to leave, when I see surge pricing on Uber....last time a concert had let out of the superdome I think.

no big deal, I just sat down back and the bar and met folks, hung out, etc....generally had fun and waited 15-20 min or so, and surge pricing went back to normal again and I was on my way.

I figure that's the "price" you pay for not driving your own car and have to wait from time to time for someone else to do it at the price I want.

That's not surge pricing

[CaffeinatedBacon]

It's not a surge price, it's the normal price. The other times are just off peak discounts.

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.