Honolulu’s largest taxi dispatch companies are gearing up for what’s expected to be a protracted fight to convince the City Council to make Uber and other ride-booking companies adhere to the same regulations all cabs must follow.
“All we want is a level playing field,” says Howard Higa, president and CEO of TheCab, Hawaii’s largest taxi dispatching company.
Transportation network companies such as Uber and Lyft offer customers who tap an app on their smart phone taxi-like services but in the drivers’ personal cars, driven without taxi licenses.
At Uber, the bill for such a ride goes straight to the passenger’s credit card on file with the company. In Uber’s ride sharing service, no tipping is required or expected.
Uber fans love the convenience and pricing, which can sometimes be cheaper than regular cab fares.
Currently, neither the state nor Hawaii’s counties regulate the drivers of Uber or other ride-hailing companies.
“Uber and other similar TNCs deliver passengers from point A to point B for a payment. That’s exactly like a cab. They should be under the same regulations as taxi drivers.” — Howard Higa, TheCab
“It’s like the wild west out there,” says Higa.
“It’s a whole new animal,” says Dale Evans, of Charley’s Taxi.
Higa says since Uber and other ride-booking operations have come here his cab drivers have lost about 20 percent of their revenue or close to $250,000 a year.
“Our hands are tied with all the regulations we must follow and the fees and charges we must pay to operate. Obviously we can’t compete with companies who are free from the same constraints,” says Higa. “It infuriates all the taxi companies here.”
Higa’s company is joining forces with Charley’s Taxi, EcoCab and taxi drivers to try to convince the Honolulu City Council that Uber and Lyft drivers should be certified by the city just like cabbies.
Mayor Kirk Caldwell said Monday that any regulations to be imposed to govern taxis and the new ride-booking companies have to be fair.
“They have to provide a level playing field and not have one set of rules for one group and another set of rules for another group. They all must be able to compete fairly,” says Caldwell.
The mayor’s spokesman, Jesse Broder Van Dyke, says a “level playing field” could mean reducing some of the many regulations imposed on traditional taxis now to allow fair competition with ride-booking companies.
Brian Hughes, general manager for Uber Technologies in Hawaii, says the companies are not traditional taxis and should not have to follow traditional cab regulations.
He says Uber is valuable to the community for the alternate form of transportation it provides as well as the job opportunities for car owners to make money as drivers in their spare time.
Hughes says all that talk of new rules is just cab companies wanting to see Uber fail.
“Many traditional taxi dispatch companies would prefer to regulate Uber out of business than to have to compete with it,” says Hughes.
“I don’t care if 50 ridesharing companies come to Honolulu,” he says. “I love competition but the competition has to be on a level playing field with everyone playing by the same rules we are forced to follow.”
Uber has been in Hawaii for almost two years with operations in Honolulu and on Maui. The company prides itself on transparency but it refuses to say how many drivers it has in Hawaii.
“Proprietary information,” says Hughes.
Hughes calls ride-booking “a new, innovative model” based on computer software that was not in anyone’s wildest dreams when government regulations were created for taxis more than 50 years ago.
Hughes says Uber is okay with being regulated by the state, but says the regulations should be attuned to its new business model, not to municipal taxi regulations from the long-gone past.
Higa says “Uber and other similar TNCs deliver passengers from point A to point B for a payment. That’s exactly like a cab. They should be under the same regulations as taxi drivers.”
On Oahu, that would mean written and verbal tests, regular vehicle inspections, and physical health exams and car inspections.
Higa says the transportation network companies also should be required to have meters in their cars and have their fares set by ordinance.
Uber uses what is called surge pricing. That means if there is high demand for drivers at certain times, the company’s software pricing algorithm can automatically raise the price to balance supply and demand. But passengers are informed about the price hike to give them the option of refusing the ride.
Hughes says, “Dynamic pricing is to get more cars on the road and help ensure users always have a ride when they need it most.”
Cab company owner Higa calls surge pricing “gouging or extortion.” He says it’s another way taxi drivers can’t compete because the city sets their prices.
Higa says Uber and Lyft drivers should have to carry their own commercial drivers’ insurance because they are doing commercial business.
“Many traditional taxi dispatch companies would prefer to regulate Uber out of business than to have to compete with it.” — Brian Hughes, Uber Technologies
Currently, Uber’s drivers carry their personal car insurance, which is in effect for their vehicle until the moment they agree to accept a passenger.
Hughes says when a the driver accepts the ride, even before the passenger sets foot in the car, Uber’s $1 million commercial liability coverage becomes the primary insurance until the passengers is dropped off. Drivers are also covered by the company’s $1 million uninsured/under-insured motorist coverage and collision and personal injury coverage.
Hughes says that’s more insurance coverage than most cabs are carrying.
Charley’s Taxi president Evans says Uber, Lyft and other ride-hailing drivers should be required to be fingerprinted as part of their criminal background checks just like all of Oahu’s cab drivers have been since before World War II.
Evans calls the requirement for a health exam essential “so they don’t pass on communicable diseases and so they can drive safely without succumbing to a stroke or another major ailment.”
Uber says its drivers have already been found physically fit to drive by passing their driver’s license tests. But the driver’s license test only requires a vision test, not a complete medical examination to determine a driver’s physical health.
Cab companies have raised concerns about passenger safety when the passenger gets in an unregulated ride-sharing vehicle.
Hughes says Uber does thorough criminal background checks on all its drivers by reviewing county, multi-state and federal records going back seven years.
Honolulu County requires that cab drivers have clear criminal and driving violation records, but only for only the last two years, before they are certified to drive.
Hawaii lawmakers this year considered but failed to pass a bill to regulate Uber and other ride-hailing companies by putting them under the state Public Utilities Commission.
PUC chairman Randy Iwase opposed the idea, saying the TNCs should be regulated by the city like all other car-for-hire services. Iwase also said that the PUC didn’t have the resources to oversee the new companies.
While embracing the idea of the state rather than city regulating transportation network companies, Uber did not like some of the provisions in this year’s legislative effort that would have required the company’s drivers to buy additional insurance it says was unnecessary.
Although lawmakers shelved the “Uber Bill” this year, it is expected to be revived next session.
“Uber is setting a precedent by its impact on other businesses and industries that has not been thought out by the politicians and business leaders.” — Dale Evans, Charley’s Taxi
Hughes says Uber will be back at the Legislature to keep pushing for state rather than city regulation. Uber favors state permits for all ride-booking companies in Hawaii and thinks there should be state driver screening and insurance regulations.
Hughes says state regulation will bring more stability to the hundreds of Hawaii drivers who are depending on Uber for additional income.
And he says a more stable environment could bring Hawaii some of Uber’s more popular products, such as delivery services and Uber Pool, a service to connect strangers living near each other in car pools.
Lawmakers in 19 states this year passed measures to regulate transportation network companies. In addition, seven states are considering legislation for TNCs.
Nevada has banned Uber, Lyft and other ride-sharing companies, but the TNCs are expected to be back on the road again following implementation of new regulations in a law signed by Gov. Brian Sandoval in May.
Meanwhile, Honolulu’s taxi companies will do everything they can to keep the regulation issue with the city where they say it belongs.
And also in the bill they are crafting, they will to try to loosen some of the regulations taxi cabs have been under so long, such as the archaic rule that makes them wait for riders in taxi stands.
Evans of Charley’s Taxi says, “Uber is setting a precedent by its impact on other businesses and industries that has not been thought out by the politicians and business leaders.”
Higa says, “After the ride-share companies destroy our industry, the politicians will say, ‘Sorry. We should have prevented them from coming in.’”