Honolulu Says Its Tow Contractor Overbilled. Taxpayers Will Pay The Price
Honolulu demanded its towing contractor, accused of overcharging, issue refunds to drivers. When the company said no, taxpayers were stuck with the bill.
After Honolulu’s towing contractor was accused of overcharging hundreds of drivers in 2023, the county sought to hold the company accountable.
All Island Wreckers, Inc. had been charging drivers $900 for each 15-minute chunk of time spent hooking up a car — amounting to $3,600 every hour. The city said that was “an egregious breach” of its contract and the company would need to issue refunds.
But the company denied wrongdoing, and more than two years later, refunds never came. Now taxpayers will be charged $125,050 to compensate some of the customers who were allegedly overbilled, according to a payment plan approved by the Honolulu City Council on Wednesday.
“This would intend to make them whole,” deputy corporation counsel Duane Pang testified, “and they could not go seek further damages.”
The settlements with drivers draw to a close a dispute that has dragged on for years. But city officials at the council meeting did not offer an explanation for why taxpayers, rather than All Island Wreckers, are covering the cost.
Council member Matt Weyer, who was at the meeting, didn’t know.
“That’s an outstanding question,” he said.
Drivers started complaining about charges soon after All Island Wreckers became the city’s exclusive towing contractor in the beginning of 2023. At a town hall hosted by Mayor Rick Blangiardi that April, one resident asked whether the city monitored its towing contractor for overcharging.
Department of Customer Services’ then-Deputy Director Derek Mayeshiro responded that the city had determined the contractor to be the best option from an open bid process. He said he would follow up with the resident afterwards.
“My advice to you, if you’re worried about overcharging: Don’t get in another accident,” Blangiardi joked.
But even charges for relatively minor collisions can wrack up quickly.
One customer who spoke to Civil Beat three years ago, Robert Scott, said he was charged $1,172 after his car was rear-ended at a red light: $172 for towing, $100 for four days of storage and $900 for unspecified “charges.”
“I don’t usually get that kind of angry,” Scott said at the time. Civil Beat was unable to reach him this week.
A year later, a city review appeared to support the public’s complaints. Within the first six months of 2023, 782 towing invoices showed inappropriate $900 charges, Honolulu Customer Services Department Director Kim Hashiro said in a statement posted in 2024 to her department’s website.
If All Island Wreckers failed to come up with money and a plan to repay customers in 10 days, she said in a letter to the company’s president, Kanoelani Perry, the city would terminate its contract with them. But that didn’t happen. All Island never refunded customers, and it remains the city’s exclusive towing contractor.
In an interview, Perry said All Island Wreckers doesn’t charge for the first 15 minutes of a towing job, and that there’s a variety of reasons why it charges increments of $900 for jobs where hooking up the car takes longer. The amount of time a hook-up job takes can correspond to its difficulty. She said the company didn’t refund customers because the city never justified why it disapproved each of the 782 invoices.
“To this day, I still have not gotten a reason as to why they have rejected it,” Perry said.
Disapproval Went Nowhere
When a car is abandoned or gets into a collision, police officers on the scene will call the city’s exclusive towing contractor to come retrieve it. The towing company brings the car to its lot, and if the car’s owner doesn’t pick it up within 30 to 45 days, it gets sold at an auction.
The towing company receives the money if someone buys it, and if nobody buys it, the city pays a flat fee to the towing company.
State law sets a cap for towing companies – $75 for a standard tow, for example, in addition to mileage and storage charges – and allows “reasonable” extra charges “for excavating vehicles from off-road locations.”
All Island Wreckers has been paying Honolulu $3,000 per month for its exclusive right to tow on Oʻahu roads. In exchange, the company gets to bill vehicle owners for its services.
Civil Beat reported on community concerns about overcharging in June 2023. At the time, Hashiro initially said that All Island Wreckers was only following its contract, which allowed for additional charges in tricky circumstances. But Hashiro later changed her tune and in July of that year and told All Island Wreckers to send her department invoices and documentation supporting each $900 charge. That’s when she found hundreds of instances of overcharging, which she announced in a post on her department’s website a year later.
“That fee is limited by contract and by law to situations that required excavating or removing vehicles from off-road locations, including ravines and streams,” Hashiro said in her post.
In a July 2024 letter to Perry, Hashiro invoked her authority as the department’s director and said she was disapproving the invoices. Each fee must be returned to the vehicle owner along with an extra $100 in damages, she said, amounting to over $734,000 that All Island Wreckers owed.
But Perry never paid, and now the city plans to use taxpayer dollars to compensate affected vehicle owners.
Still Applying $900 Charges
Civil Beat repeatedly requested to interview Hashiro over the last month but her agency’s spokesman, Harold Nedd, said on Wednesday that she was not available to speak. In a written statement, he said the payout of $125,050 was determined after notifying affected vehicle owners and seeing who responded.
“After receiving approximately 100 responses, the Department of Customer Services directed those claimants and affected insurance companies to file formal claims with the Department of the Corporation Counsel,” he said.
He also said the department gave All Island Wreckers formal written notice in 2023 that the $900 charge is only supposed to be for specific situations. The department has stayed in contact through meetings and other written notices to ensure All Island Wreckers complies, Nedd said.
Despite all the hubbub three years ago and Hashiro’s threat to terminate the contract, Perry said her company continues to apply the $900 charge to this day.
Perry said her default approach is that after the first 15 minutes spent hooking up a car on any towing job, All Island Wreckers charges $900 for every additional 15 minutes spent attaching the car. Her company gives hundreds or thousands of dollars in discounts depending on the job circumstances, she said, including if the time the job takes just barely triggers the next $900 charge.
“It just depends on, again: time, the situation, what work was done,” she said.
She said towing can be dangerous work.
“I’ve had drivers nailed on the side of the road,” she said. “They get clipped by cars all the time.”
All Island Wreckers’ contract with the city runs through the end of 2026. In the meantime, the city is soliciting new companies to take over the work, which it’s splitting into two components: one contract for towing abandoned vehicles and another for towing vehicles involved in traffic violations or collisions reported by the Honolulu Police Department.
The company’s current contract language broadly says that “reasonable” charges can be issued for “non-statutory and difficult” hookups – meaning jobs that don’t fit neatly into defined state law – with the city the sole judge of approving or disapproving charges prior to accepting an invoice.
New contracts would not include that same option. “Difficult” jobs would warrant a flat $30 charge per tow rather than $900 every 15 minutes, per new contract language. Overturned vehicles would warrant a $35 charge per tow.
The process to secure a new contractor has been challenging though, in part because an anonymous entity has protested the city’s request for bids. That has delayed bidding deadlines by months.
Asked whether she or her company was the one protesting the bidding process, Perry first declined to say and then said it wasn’t her.
“We’re not allowed to disclose any of that,” she said. “I’m not aware of any of that, no.”
All Island Wreckers has found an ally in council member Andria Tupola, who received a $2,000 campaign donation from Perry in January and donations of roughly the same amount from her husband Paul Perry in 2018 and 2019.
Tupola initiated a separate audit of the city’s towing contract, including the city’s payment schedule to the contractor and how the contract is being administered.
In her 2024 letter to Perry, Hashiro said that her department would withhold contractual payments to All Island Wreckers to protect itself from claims against the department, and Tupola said during Wednesday’s council meeting that the city was almost $3 million behind in payments to All Island Wreckers in 2025.
“The city still hasn’t paid full payments for February, April or May of this year,” Tupola said, “and it’s still straggling behind trying to catch up with payments.”
During an interview in May, Tupola said the city shouldn’t have waited a year to dispute All Island Wreckers’ overcharges.
“You have to dispute it within 30 days,” she said, “because that’s what’s written in the contract … You don’t send a dispute list a year later.”
By not paying All Island Wreckers, she said, the city was also depriving the company’s subcontractors of expected payments.
“You’re hurting everybody that subcontracts,” she said.
The report from the city auditor, which reports to the Honolulu City Council, is due next May.
A separate investigation conducted by the state Department of Commerce and Consumer Affairs, which reviews issues related to consumer protection, is still pending three years after Civil Beat first wrote about the issue, spokesperson William Nhieu said in an email.
That’s because the state decided to defer to the city’s own review of the towing charges, though the state remains available if the city needs help resolving disputes, Nhieu said.
The Department’s Office of Consumer Protection, he said, “continues to receive complaints from the public about the City’s towing operator,” including about $900 charges. He said the state shares these complaints with the city so the city can determine whether the charges are lawful.
UPDATE: This story has been updated to include a response from the Department of Commerce and Consumer Affairs that came after publication.
