Uber presses Oahu customers and drivers to reject Council bill

Uber sent emails to hundreds of thousands of its customers and drivers Monday urging them to submit testimony to the Honolulu City Council opposing a bill that would place more restrictions on the transportation network company and other operations like it.

The email featured the subject line “Uber service on Oahu is at risk.”

Bill 35, the latest in the emotional tug of war between the upstart ride-­hailing companies and drivers and the more traditional taxi companies and their cabbies, is up for a final vote 10 a.m. Wednesday at Honolulu Hale.

“The Honolulu City Council is considering new regulations that would impose outdated taxi-style requirements on ride share,” the email states. “These proposed regulations put the availability of reliable, affordable transportation on Oahu at risk.”

A key point of contention is language in the bill requiring the customer services director to establish a cap on how much ride-hailing drivers could charge during periods of “surge” or “dynamic” pricing, when demand is at its peak.

The email does not mention surge pricing, but a blog on Uber’s website, as well as an Uber fact sheet on the bill, both focus on the practice and the company’s concerns about a cap.

The blog points out that city Customer Services Director Sheri Kajiwara testified that the administration opposes the idea of setting the prices for ride-hailing companies and instead wants to allow taxi companies more flexibility in pricing.

Uber and Lyft officials testified in Council committees last month that such a cap would be the first such restriction imposed on the transportation network companies in the U.S.

The companies argue that surge pricing is a necessary component of its platform because it encourages drivers to get on the road when demand is highest. But taxi companies and cabbies say surge pricing creates an unfair advantage over them because their pricing is capped by state law. Some opponents of ride-hailing companies also accuse them of charging exorbitant prices when potential riders are at their most vulnerable.

Council Chairman Ernie Martin, who wrote the latest draft of the bill, said the language does not prevent transportation network companies from charging more during surge-pricing periods. “All it seeks to do is put a maximum ceiling as to how far they can charge with respect to that particular business practice,” he said, adding that the language is designed to guard against predatory pricing.

Martin said many of the emails received Monday did not consider other changes made in the latest draft to meet concerns raised by Uber and Lyft.