Transportation Network Companies, like $62.5 billion Uber and $2.5 billion Lyft, would like Hawaii residents to believe that they are simply app-based companies that match drivers with riders. They claim that they are simply “ride-sharing services,” and urge lawmakers and the general public to have sympathy for their “part-time” drivers who are just trying to make ends meet in high-cost Honolulu.

While that might be true for a percentage of their drivers, the ultimate goal of these mega-businesses isn’t so altruistic.

Uber, in particular, has been quite aggressive nationally, garnering partnerships with major airlines and big-name hotel chains. Partnerships with these large travel corporations illustrate that TNCs are not just offering casual or commuter ride-sharing services to supplement their driver’s income. They are targeting business serviced by professional chauffeurs, notably taxi drivers.

Uber Application in Hawaii
Taxi companies are economically penalized when ride-hailing companies like Uber and Lyft don’t have to comply with the same rules and regulations. Anthony Quintano/Civil Beat

TNCs are not complying with rules and regulations in order to gain competitive advantage and trample over the local, small business taxi industry. This is profoundly unfair in the Honolulu market, which has been an open entry, no medallion system for almost three-quarters of a century. Honolulu presents a unique microcosm in the world, actually.

Contrary to what some media portrays, it is taxi drivers — not TNC drivers — that are jeopardized.

In Honolulu, the great majority of taxi drivers are self-employed, independent contractors. They represent the smallest of small business. Many drivers have invested in their own taxicabs and contend with costs like commercial insurance, maintenance and other expenses. They have also gone through the process of being vetted, which includes fingerprinting and criminal and physical screenings by the City.

Taxi dispatch companies in Honolulu are small businesses as well, usually employing small dispatch and office staffs. Long before TNCs entered Honolulu, several taxi companies switched to digital dispatching. Some local companies also utilize high-tech apps. This is not just a battle of tradition vs. technology, as some would have you believe.

For Hawaii’s small businesses to compete against multi-billion-dollar Goliaths like Uber and Lyft, when they are given very significant competitive advantages, is absolutely unfair.

The local taxi industry wants a level playing field. We are asking that regulators apply the same rules to everyone. Not just for our benefit, but to equalize driver costs, and to provide consumer protection. These are things that should not be compromised.

All drivers of vehicles for hire, like taxicabs and TNCs, should have the same criminal background checks. TNCs claim their background checks are sufficient; however, Uber recently settled a lawsuit filed by the State of California for $25 million for giving the general public a false sense of security by claiming Uber’s own background checks were better than background checks done on taxi drivers. Lyft settled a similar case for $500,000 in December 2015. In February, Uber also settled for $28.5 million in a case brought by consumers that, again, had to do with Uber’s claim of providing “the safest rides.”

Another loophole that TNCs exploit has to do with insurance. Taxicabs carry commercial liability insurance; TNCs don’t. TNC coverage generally costs less and provides less protection. A TNC driver’s personal auto insurance generally will not cover accidents during a commercial trip. According to some TNC policies, coverage is dependent upon whether the app is on or off. This ambiguity exposes passengers and other potentially injured parties or property to coverage gaps and may lead to claims against third parties such as the local government.

There is the issue of surge-pricing — otherwise known to as dynamic-pricing or not-so-nicely as price-gouging. The reality is that surge pricing is not in the best interest of the general public. Customers might take a ride on a TNC vehicle to a destination for $10 to find their return trip might cost several times more. Traditional taxis also experience demand shortages, but are not allowed to surge-price.

Even though they offer the same transportation services as taxicabs, TNCs want you to believe they are different. In reality, TNCs are simply a digital dispatch service for inadequately licensed and insufficiently vetted drivers. Not leveling the playing field in Honolulu is unjust and unfair.

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