Ky Vuong likes to serve his passengers light refreshments such as chilled water and apple slices as he taxis them around the island in his 2012 Mercedes with a fluffy pink mustache attached to the car’s grill.
The fitness instructor says he’s earning $25 to $35 an hour driving for Silicon Valley startup Lyft, which launched on Oahu last month.
The flamboyant mustache and signature fist bump that drivers use to greet Lyft’s passengers clearly distinguish the car service from others operating on the island. But other differences aren’t as immediately apparent.
Lyft emphasizes it’s a technology platform that facilitates casual “ride-sharing,” not a taxi or limo service. This allows drivers like Vuong, who are unlicensed, to roll under the radar of state and city laws that regulate traditional cabs.
To underscore the point, Lyft doesn’t charge fares. It suggests a donation.
Lyft has competition — UberX also launched on Oahu last month. The companies often hire people seeking to make some extra cash on top of their main jobs and then pair them up with passengers through a smart-phone application that makes the dispatchers of traditional taxi companies seem like relics of the pre-Internet age.
“People want to join, everyone is excited,” said Vuong, who exudes the hip, friendly image portrayed in Lyft’s marketing materials. “It’s like a social media party.”
The companies have dodged many of the costly regulations that regular car and limo services are subject to.
But that “party” may be crashed by regular taxi and limo services upset over the arrival of strange new competitors, and by government regulators who are starting to take notice.
The Silicon Valley startups are undercutting cab fares by as much as 30 percent. They’re lean — Lyft, for example, doesn’t even have an office on Oahu — and the companies have dodged many of the costly regulations that regular car and limo services are subject to.
Ride-sharing advocates say the service fosters market competition and provides consumers with options: You can call a black cab, a taxi, or grab a ride from, say, the bartender down the street who has some extra time and a car.
Ultimately, advocates say, the cheaper fares and convenient app will encourage people to drive their own cars less, which would cut down on greenhouse gas emissions and relieve traffic congestion through this app-driven form of paid car-pooling.
But taxi companies say the ride-sharing companies are nothing more than illegal, regulation-dodging bandit cabs.
The crux of the debate comes down to whether ride-sharing companies are really any different than regular cabs when it comes to government regulation.
David Jung, general manager of Honolulu’s EcoCab, says UberX and Lyft drivers should have to abide by the same rules as regular taxi drivers. He rattled off regulations cab companies must follow.
Meters have to be calibrated to make sure they aren’t overcharging customers. Drivers must pass physicals that include tests for high-blood pressure and diabetes to make sure they aren’t at risk of passing out or having a heart attack behind the wheel. They are subject to background checks administered by the Honolulu Police Department. And drivers must know where all the main government buildings, hospitals and emergency rooms are, as well as the most direct route to them.
“What I don’t understand is why Lyft and Uber happen to be above the law,” Jung told Civil Beat. “Are UberX drivers like an ordained priest with good ethics or a triathlete with no physical problems?”
Jung’s disdain escalated in an email he sent to Mayor Kirk Caldwell and City Council Chair Ernie Martin, urging them to regulate the companies and not be blinded by their “rich, sexy and popular” mystique.
“What I don’t understand is why Lyft and Uber happen to be above the law.” —David Jung, EcoCab general manager
“I just hope that this is not like the Western movie plot where the gunfighter enters town and the mayor, town elders and sheriff shudder in fear and quietly disappear, or worse yet, trip over each other to kow-tow to the big, bad gunfighter,” wrote Jung in his email.
Jesse Broder Van Dyke, a spokesman for the mayor, declined to comment on Jung’s email, while Martin didn’t respond to a request for comment.
Dale Evans, president of Charley’s Taxi, echoed Jung’s sentiment. She was particularly peeved by news that Hawaiian Airlines had partnered with Lyft for its publicity launch. She says the ride-sharing companies are dodging the airport fees that her drivers have to pay.
“I’m concerned number one, that an airline such as Hawaiian, who supposedly says it supports local businesses, is helping these companies that are operating outside of the law,” she said. “What can we do?”
The reactions of local taxi companies resemble those in other cities across the country and in Europe and suggest that the fight over ride services on Oahu is just getting started.
Last month, cabbies in London, Madrid, Berlin and Paris took to the streets in protest against Uber. They snarled traffic, blocked tourist centers and shopping districts and toted signs with slogans like “UberX is Just a Gypsy Cab!” and, in reference to the app, “I have deleted it . . . have you?”
The ride-sharing companies have also angered cabbies in mainland American cities and led to push-back from regulators and cops.
California regulators recently ordered the companies to stop operating at airports — ride-share drivers have been serving San Francisco, Oakland, San Jose, Los Angeles and San Diego.
The government crackdowns have in many cases been met with a surge of protest from the public that sometimes plays out on social media sites like Facebook and Twitter.
Customer devotion to ride-sharing stems largely from the cheaper fares and convenient apps.
After signing up for an Uber or Lyft account, which includes putting a credit or debit card on file, users can order a ride with a simple click. The apps show a picture of the driver, his or her name and star rating. (Both drivers and passengers rate each other.) A GPS map shows the car as it travels to pick you up, so there is no guessing as to its whereabouts or how long before it will arrive.
There’s also no money to hand over, as fares and tips are processed through the app.
Civil Beat tested out UberX and Lyft. Our Lyft driver showed up within 10 minutes in a sparkling, clean truck with the signature, pink mustache attached to the grill and smaller, fluffy mustaches on the dashboard. A former commercial driver, he easily maneuvered through heavy traffic on H-1 to downtown Honolulu.
The ordinary distance between driver and customer was replaced by casual, front-seat conversation about bowling and the driver’s past work as a document shredder. The normal ritual of paying the driver at the end and tipping was replaced with friendly goodbyes — indeed, kind of like your neighbor had just given you a lift.
Our UberX driver was equally disarming, as he chatted openly about the controversy that’s plagued the car-sharing companies. He said traditional cab companies either need to “evolve or die.”
Government officials in Hawaii will likely find themselves grappling with the same questions troubling other states and cities as they define exactly what the companies are and, in some cases, try to find a place for them in the market.
William Stokes, an investigator at the Hawaii Public Utilities Commission, said that what the ride-sharing drivers are doing is illegal under state law if they don’t obtain a license from the PUC or city.
“We’re empowering people to take control of their economic future with an opportunity that never existed before.” — Brian Hughes, Uber manager in Honolulu
The PUC regulates services such as limousines and shuttles, while the city oversees metered taxis.
“If I want to pick someone up and receive compensation, that would be illegal,” he said.
To get a license from the PUC requires filling out an application, which can take three months to process, said Stokes. It includes financial disclosure requirements related to fixed assets, loans, projected revenues and income.
The PUC is starting to get inquiries from some car-sharing drivers about how to apply, said Stokes.
He emphasized that the PUC’s oversight doesn’t extend to the companies, just the drivers.
City regulations governing taxis are extensive, covering such things as the condition of the cab, the maintenance of a detailed log and how long it can take to drop off a passenger in a tow zone (the maximum is 30 seconds).
Representatives from Uber and Lyft said that although they don’t think they need government approval to operate on Oahu, they have their own stringent standards.
At Uber, for instance, cars can’t be more than 14 years old and must have four doors.
Ratings provide quality control — drivers can be fired if their star ratings drop below a certain level. Both companies also say they perform background checks on drivers and have insurance policies that cover their drivers. As for the knowledge of local roads and the most direct routes — technology has evolved, there’s an app for that.
Brian Hughes, a manager for Uber in Honolulu, said the biggest perks his company brings to the market are greater efficiencies and providing income for people in transition or needing some extra money.
“We’re empowering people to take control of their economic future with an opportunity that never existed before,” he said.
Drivers are given the flexibility to work whenever they want and keep 80 percent of what they make.
“Lyft provides innovation and community and allows people to connect with one another,” said Katie Dally, a Lyft spokeswoman in San Francisco.
But for Jung at EcoCab, it ultimately comes down to equity.
“The only difference is the cab companies can’t hire anyone that is not licensed, whereas Uber and Lyft can hire anyone,” he said. “They can hire my mom — who isn’t licensed, by the way.”