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Uber and Lyft, two of the most popular ride-hailing companies in the U.S., support Hawaii lawmakers’ efforts this session to tighten regulations — so long as those new laws don’t affect their business too much.
But Hawaii’s taxi and private bus tour companies feel the proposed regulations don’t go far enough to clamp down on these relative newcomers to the industry.
Both sides have introduced bills proposing a regulatory framework for companies like Uber and Lyft. And as hundreds of bills move from the House to the Senate and vice versa in the coming weeks, lawmakers will decide which version — if any — should become law.
“Uber just wants a simple regulation bill to stabilize the industry,” Bob Toyofuku, a Hawaii lobbyist representing Uber, told the House Finance Committee on Thursday. “They’ve been fighting different opponents for the last six years, and they want statewide regulation.”
House Bill 2002 and Senate Bill 2808 would both put ride-hailing services under the auspices of the state Department of Transportation. However, they fall short of regulating them to the extent of taxicabs, which local transportation companies feel puts them at a disadvantage.
“These two (transportation network companies) want to monopolize the taxi and ride sharing transportation market in Hawaii by passing legislation that effectively provides them with privileged operating advantages that the taxis and (Public Utilities Commission) regulated passenger carriers do not have,” Roy Pfund, president of tour bus operator Robert’s Hawaii, wrote in testimony to lawmakers.
Both bills cleared their final committees in the House and Senate on Thursday and are on track to go to a full vote by each chamber sometime in the next two weeks.
Both bills are similar to legislation introduced elsewhere in the U.S. that allows states to regulate companies like Uber and Lyft. Hawaii would be one of the last states to do so.
And the fight between local transportation companies and their ride-hailing, app-based cousins playing out in the Legislature is also similar to conflicts that sprang up in other states.
On one side are the ride-hailing companies that pushed the original versions of the bills forward, and on the other are local transportation companies that, in the case of the House version, have successfully lobbied to get some of their amendments into the bill.
Organization expenditures filed with the state Ethics Commission show that in 2019, Uber spent $21,064 lobbying lawmakers on the issue while Lyft spent $95,500, almost the entirety of which went to Jennifer Sabas, a former aide to the late U.S. Sen. Daniel Inouye and an influential lobbyist.
The Legislature tried last year to pass a law regulating transportation network companies but it was ultimately hung up late in the session.
House Bill 2002 and Senate Bill 2808 are modeled after a law passed in the City and County of Honolulu in 2016.
Under both bills, the companies would need to run potential drivers through background checks. They’d need to pay permitting fees to operate in the state.
Uber and Lyft support both but they prefer the Senate bill, which has largely been left untouched since it was first introduced. The original versions of both bills were already agreed upon by Uber, Lyft and the state Department of Transportation.
HB 2002 was amended to give more power to the DOT to launch investigations if they received complaints from riders. It would also create a lengthy hearings process conducted by the DOT regarding any complaints of drivers. Documents related to the investigation would be made public after the hearings conclude.
Those amendments were originally found in a separate bill, HB 2643, which was put forward by the Hawaii Passenger and Property Carriers Association, a new group that’s lobbying on behalf of taxis and other carriers, and had the support of Robert’s Hawaii and the Hawaii Transportation Association, a longstanding group that serves the broader commercial ground transportation industry.
That bill had the support of local transportation companies but was opposed by Uber and Lyft.
HB 2643 included stronger provisions in fare transparency and would require companies to show proof of insurance as well as proof that they are registered to pay the state’s general excise tax.
It also would have set up a lengthier process for potential drivers to apply with the state.
Rep. Henry Aquino, chair of the House Transportation Committee, plugged into HB 2002 parts of HB 2643 that dealt with investigating ride-hailing companies at a Feb. 7 committee meeting.
Aquino’s office said he was in meetings and couldn’t be reached for this story. Senate Transportation Committee Chair Lorraine Inouye, who introduced SB 2808, had flown home while the Legislature is in a five-day recess, which ends Feb. 27.
The ride-hailing companies take issue with the investigations and hearings parts of the bills.
Toyofuku suggested House lawmakers take out a part of HB 2002 that gives the DOT director power to inspect company records because a separate part of the law already provides enough oversight.
Traci Lee, a public policy manager for Lyft, recommended axing the entire section on investigations and hearings and simply placing it under Hawaii’s administrative procedures law, which governs things like contested cases.
“Lyft urges Hawaii to adopt a statewide regulatory framework for rideshare to avoid a patchwork of local regulations across the islands that can create confusion and inconsistency for riders and drivers,” Campbell Matthews, a Lyft spokeswoman, said in a written statement on the bills.
Both HB 2002 and SB 2808 explicitly state that drivers are independent contractors and not employees. A California law that went into effect this year would, among other changes, make it harder for Uber and Lyft to classify people who drive for them as contractors, which don’t have the same benefits as employees.
Hawaii’s regulations would also exempt them from laws that govern other passenger carriers. Deems Narimatsu, who represents the Hawaii Passenger and Property Carriers Association, criticized that exception in testimony to lawmakers as special treatment.
Other transportation companies face more stringent regulations.
Local taxis, for example, are regulated by the Public Utilities Commission, which sets what rates they can charge passengers. Under the new regulations, ride-hailing companies like Uber and Lyft would still be able to set their own fares.
But these ride-hailing companies argue that the same sets of requirements would make it difficult for drivers just looking to earn some side cash to support their families.
“My professional life has always dictated when I can be there for my wife and kids,” Lance Wheeler, a freelance production manager and Lyft driver, told the House Finance Committee, adding that driving for the company has freed up some hours in his day to spend with family.
Hawaii’s four county mayors have all asked the Legislature to allow them to charge ride-hailing companies a per-ride fee that could go toward funding infrastructure projects.
SB 2122 would allow them to do that. It’s awaiting a hearing by the Senate Ways and Means Committee, which it needs to clear before Feb. 28 if it hopes to stay alive this session.
A similar bill was never heard in the House. Honolulu officials wrote in testimony to lawmakers that they hope such a fee could quell the congestion of cars in tourist areas.
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