I drive for both ride-share companies, Lyft and Uber. Bill 35 in the City Council has a lot of items that affect the ride-share business — some are needed, but my comment is focused on “surge” (Uber) or “prime time” (Lyft) pricing, when fares increase when demand is high. I’ll refer to it as “surge.”
First I really don’t like it when government attempts to control pricing in private enterprise, especially when the market demands it.
In any market, when demand is higher than supply, prices rise. Some examples of when government allows pricing increases when demand is high:
>> Airline prices during holiday seasons like Thanksgiving and Christmas; also hotel room prices increase during these times.
>> Real estate and rental prices go up when there is more demand in an area than the supply of homes. This has been constantly increasing for years in Hawaii.
>> Prices of stocks: When there are more buyers, the price of a stock goes up even though the underlying company is not making money. One example now is Tesla.
Second, why should the government regulate our prices? Let the market reflect the pricing. The price of gasoline, our expense, rises and falls with the market. I think our fees should reflect the demand of the market.
Third, the customers are always in control of their transaction. They don’t have to use our services when the demand is high. They always have the option of using TheBus or a conventional taxi.
Fourth, I have given about 700 rides during my brief working history with the ride-share companies. I haven’t heard one complaint about “surge” pricing. I have heard only positive comments that we are operating in Hawaii and the customers are very happy that we provide an option for them. Also, customers have said that the “surge” pricing was still cheaper than a conventional taxi cab. If this is the case, then “surge” pricing should be the standard price.
I think the best solution would be that the apps of the ride-share companies disclose to the customer when “surge” pricing is happening. Also a lot of times, one ride-share service will have the “surge” pricing and the other doesn’t. Again, the customer is always in control of using our service or not. Disclosure of “surge” pricing will let them choose whether to use our services when it’s happening.
Regulating prices in any private industry is always going to be bad for any market. Hawaii is known to be one of the worst states for business and bills like this trying to regulate pricing is probably one of the worst ways for any private business to be successful.
If government feels the need to regulate something, why not regulate one of our most expensive items in Hawaii: the price of real estate? If the real estate commission that Realtors charge is eliminated or limited, say at 1 percent instead of the standard 6 percent, it would bring down real estate prices for everyone.
Lastly, the ride-share business is very small when compared to the rest of private commerce here. I can’t see why putting all this effort into hampering our revenue will help the majority of citizens in Hawaii. The income I earn working with the ride-share companies doesn’t even cover all my bills; also, a lot of full-time drivers are barely making ends meet to live here.
Again, the best solution would be that ride-share companies disclose when “surge” or an increase of pricing is happening. Make that mandatory. Not capping the fees. Ultimately, let the customer decide whether to use our services or not.
Wes Sakamoto is a futures/options trader and insurance consultant living in Kaneohe.
