The ‘surge pricing’ cap for the ride-hailing companies has been passed by the lawmakers of Honolulu - TNBC USA

(News Agency) – Honolulu might become the first U.S. city to restrict fares that ride-hailing companies can charge when demand spikes, after a vote at city council on Wednesday, the Honolulu Star-Advertiser newspaper reported.

Uber Technologies Inc (UBER.UL) and Lyft Inc are Ride-hailing companies that use a model called “surge pricing” in which the ride fare soars high when factors like rush hour and bad weather increase demand for the service.

The Customer Service of the Department said it objected to the measure because ride-hailing company customers already know the fare they will be charged whereas it is not the case for the taxi cabs, the news website reported.

Uber also made the case that riders know the fare upfront the Honolulu Star-Advertiser newspaper reported, quoting a statement from the company. If the measure becomes effective, it would also confine novelty, restrict choice and could endanger availability of Uber service on the island, the company said.

The measure “is a solution in search of a problem, as we’ve been told the City hasn’t received a single consumer complaint about our dynamic pricing model,” Tabatha Chow, a senior operations manager quoted.

In the last month, Uber and Lyft Uber officials told council members that a cap on fares would be the first such restriction levied in the United States, the Honolulu Star-Advertiser reported.

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