The Honolulu City Council approved a bill to regulate ride-hailing services such as Uber and Lyft on an 8-1 vote Wednesday in a victory for taxi companies that ended months of discussion.

After the Council voted, Uber and Lyft drivers immediately began filing out of the City Council chambers, but a group of taxi supporters in the back erupted in applause.

“Finally!” one said.

Wednesday's city council hearing was standing room only.
Wednesday’s hearing was standing room only, with some people sporting Lyft and Uber shirts. Courtney Teague/Civil Beat

In the past, Uber and Lyft representatives have said that over-regulation could force them to quit doing business on Oahu, but there was no such talk Wednesday from either company.

“I think right now we’re just going to digest the decision, come back and continue our efforts to collaborate with the Council and the administration,” Uber Hawaii General Manager Brian Hughes said. “We’re certainly hopeful that we can find a different path forward.”

The chambers were standing room only when the hearing began in the morning. Seats were speckled with testifiers wearing hot pink Lyft T-shirts and black Uber shirts with a bright blue outline of Oahu. Taxi drivers held signs that read, “Same Rules For Same Rides.”

As taxi supporters complained that Uber and Lyft had taken away customers and made it harder for cabbies to feed their families, Uber and Lyft drivers shook their heads and murmured to one another.

Efforts to regulate Uber and Lyft – what have become known as transportation network companies or TNCs under Bill 36 – had flopped in the Legislature.

The City Council bill establishes blanket regulations such as licensing and background checks for all drivers. Uber and Lyft representatives opposed the regulations, saying they will make it harder for part-time drivers to stay in the market.

Bill 36 requires Uber and Lyft to create a database to track their drivers, who will also be required to better label their car by placing stickers on car bumpers and a visible company identifier in the front window. A paper copy of the driver’s certification must be kept on display in the car and drivers must have a Hawaii license, just like taxis.

Still, taxi drivers would have preferred the bill go further. For example, they wanted Uber and Lyft drivers to be subject to fingerprint background checks, not the seven-year criminal background checks that Bill 36 requires. But those checks would apply to taxi drivers as well under the bill.

Although they didn’t get specific on details, Council members said there was room to improve the bill, but that it was a good start.

Budget Committee Chair Ann Kobayashi, who sponsored the bill, even spoke of creating another bill to set maximum limits for ride prices.

Bill 36 now goes to Mayor Kirk Caldwell. Andrew Pereira, a Caldwell spokesman, said in an email the mayor will announce his decision within 10 days.

Previously, Caldwell has said regulations for transportation network companies have to be fair and have the same rules as taxis.

If signed, the bill would take effect Jan. 1, 2017.

‘Rally Behind That Council Member’

Prior to hearing testimony Wednesday, Kobayashi announced some changes in the bill, the most notable of which was that all drivers must obtain Hawaii licenses — a loss for transportation network companies who wanted to keep the entry bar lower to attract more drivers.

She later said the change was to assure that all drivers have adequate knowledge of state road rules.

Kobayashi also clarified that while taxis will still be required to have domes, transportation network companies can have a company identifier in their front window.

Honolulu City Council member Ann Kobayashi6
Kobayashi chairs the City Council Budget Committee and worked with many stakeholders for Bill 36. Cory Lum/Civil Beat

So many people showed up to testify that Council Chair Ernie Martin limited testimony to one minute.

One taxi driver teared up as she shared her experience as a single mother relying on funds from her job, while another said her colleagues have lost as much as 40 percent of their income.

Uber and Lyft drivers lauded the convenience and accountability of their companies. Drivers said city DUIs would increase if their companies shut down Oahu operations.

The drivers, including students and a military spouse, said Hawaii’s high cost of living prompted many of them to take the jobs.

One driver noted that Kobayashi received a $2,500 donation from Dale Evans, president and general manager of Charley’s Taxi weeks before she introduced Bill 36.

The comment prompted Martin to tell testifiers all comments must be directed to him.

Immediately prior to taking the vote, Martin commended Kobayashi for her her hard work on the bill and said it was “unacceptable and totally unprofessional” for someone upset with proposed legislation to personally attack a Council member.

“I think for that reason alone all the members should rally behind that Council member (Kobayashi) to show that, you know, an attack on one member is an attack on the body as a whole,” Martin said.

Only Councilman Brandon Elefante voted against Bill 36. He took issue with a few of its specifics, including the process for how independent drivers must certify themselves if they belong to neither a taxi company nor a transportation network company.

‘A Good Start’ For Taxi Companies

EcoCab owner David Jung said he invested all of his savings into starting his company. He said he wasn’t planning on testifying because he was unsure of his stance on the bill, but ultimately decided to support it.

Some standards for taxi companies may be too high anyway, Jung said, so setting some blanket requirements that lower the standard may not be a bad thing.

“Don’t get intimidated by these requests, these are not that bad,” Jung said to the Uber and Lyft supporters.

Robert’s Taxi owner Robert Deluze testified he had a hard time making up his mind, since he believed the bill should have been about consumer protection and it “strayed” from its original intent.

After the testimony, Deluze told Civil Beat that Uber, which has a taxi-hailing service in its app, already dabbles in the industry and should fully comply.

Sheri Kajiwara, director of the Honolulu Department of Customer Services, was willing to work with taxi companies, Deluze said, so he wasn’t much worried about establishing a new certification process for transportation network companies.

Bill 36 wasn’t all he hoped for, but Deluze said he’d take it.

“It’s a good start, it’s a great start,” Deluze said. “We’re happy.”

Howard Higa, president of The Cab, said in testimony that the transportation network industry was putting “thousands of hardworking drivers out of work.”

In an Civil Beat interview after the hearing, Higa praised Kobayashi for her efforts to speak with industry stakeholders on both sides.

“I love competition. Hey, take the gloves off, let’s keep boxing,” Higa said. “But let’s do it in a fair arena.”

Another bill that was deferred by the Budget Committee level would have held taxis and transportation network companies to the exact same standards. That would have been a better option, Higa said.

Uber’s Hughes told Civil Beat his company is disappointed in the decision and said it will hurt local residents and visitors.

Hughes said Uber submitted many other bills that had worked across 30 U.S. states. The amendments Uber has suggested weren’t incorporated in the final draft, but Hughes said Uber hopes to collaborate in the future with politicians about laws affecting transportation network companies.

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