Uber will refund Sydney-siders stung by exorbitant fares when the city’s train network collapsed just ahead of Wednesday’s afternoon peak, stranding hundreds of thousands of commuters.

The ride-share operator’s offer came after widespread reports of people paying hundreds of dollars to get home, as prices leapt when the trains ground to a halt.

It also followed a call by NSW Premier Dominic Perrottet for a fare-free day for commuters suffering the latest blow after enduring months of industrial action and cancellations on the beleaguered rail network.

Every Sydney train was parked for 90 minutes on Wednesday afternoon after the rail network’s digital radio system that controls communication between trains and the rail operations centre failed. The all-clear came just after 4pm, but the flow-on effect lasted into Thursday’s morning peak.

The breakdown stranded 250,000 commuters trying to get home at the end of a steamy Sydney day, causing a ripple effect across the city’s transport system as buses quickly filled up.

“I’m really sorry for the inconvenience that many faced yesterday,” Mr Perrottet said on Thursday.

“I’ve made it very clear to the secretary of the department that my expectation is … there is a fare-free day to make up, in some way, for what occurred.”

Some commuters reported paying up to $500 to ride-share operators to get home on Wednesday, for trips that usually cost about $40.

“Sydney trains this afternoon are at a standstill. Uber fares, however, are not. Uber fare usually $20. Currently $216,” tweeted one stranded Sydney-sider.

Uber has denied that fares would have risen that much.

“Uber’s app has measures in place that stops the surge algorithm from reaching a certain level and a 1000 per cent increase is absolutely not possible,” it said on Friday.

Amid wider accusations of price-gouging, Uber said it would refund those hit by surge fees.

In a statement to The New Daily on Thursday, Uber said it had previously been alerted to city-wide transport issues by Transport for NSW. But it said it wasn’t notified of Wednesday’s outage.

“As soon as our team became aware of the train disruption, we immediately lowered and capped surge to still incentivise driver-partners who were helping Sydneysiders get home, while making rides more affordable for those stranded,” a spokesperson said.

The New Daily understands that surge pricing automatically kicked in between 2.45-3.45pm. At 3.45pm, a surge cap was added to prevent further passengers being slugged with excessive fees.

The Uber spokesperson said the company also contacted its drivers to alert them of the spike in demand, and ask them to start work to help.

“Any rider that was charged an additional amount above that surge cap, for the full duration of the outage, will be auto refunded within the next 48 hours,” the spokesperson said.

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Sydney Trains ‘confident’ ahead of Thursday’s commute

Sydney Trains chief executive Matt Longland also apologised, saying the radio issue was traced to a failed component in an IT system.

It had since been replaced after engineers worked through the night.

“The system is stable,” Mr Longland said.

“We’re confident that we will have a normal timetable operating today.”

Transport for NSW chief operations officer Howard Collins said the communications system was designed to automatically switch over from one channel to another if there was a problem.

“But for some reason … it did not operate as it should,” he told Sydney radio 2GB on Thursday.

Sydney Trains has ruled out a cyber attack, after tracing the fault to the IT component. Engineers are now investigating why the component failed and how to prevent it happening again.

“We’re also going to ask independently for another team to have a look at it so we’ve got a real forensic understanding of the real root cause,” Mr Collins said.

Sydney’s train network appeared to be running on time on Thursday, with no delays early in the afternoon.

Labor transport spokesperson Jo Haylen said the state government was responsible for providing a safe and reliable train system – including backup systems and buses to help stranded commuters.

“The lights were out across Sydney trains but they are also out in the transport department,” she said.

“No one knows who’s in charge, and passengers are paying the price.”