Proposal puts Uber, Lyft on same level as taxis

A Honolulu proposal to classify Uber and Lyft as taxicab companies, which was drafted with the help of taxi owners, would be among the most aggressive measures a city has taken to regulate ride-hailing companies, according to industry observers.

“I’ve never seen them trying to put (ride-hailing) under the same rules as a taxi,” said Harry Campbell, who operates therideshareguy.com blog and podcast. Campbell, based in California, monitors national trends and regulations involving Uber, Lyft and similar services.

Dave Sutton, spokesman for the national Taxicab, Limousine & Paratransit Association’s whosdrivingyou.org initiative, agreed.

“I haven’t seen any legislation” that so absolutely levels the playing field, “with the exception of New York City,” Sutton said.

Bill 85, introduced by City Council Chairman Ernie Martin and Councilwoman Ann Kobayashi, would expand the definition of taxi companies to include any entity that “functions as an intermediary between the passenger for hire and the taxicab or taxicab driver, and receives a portion of the consideration paid … regardless of whether the intermediary performs its function entirely or in part using any form or type of technology.”

Kobayashi described the bill as a consumer protection measure. However, Bill 85 would make other changes to taxi regulations as well. Cab drivers would be able to charge new fees, and taxi rates could double at night, for special events and on holidays. The adjustable rates would be similar to “surge” pricing charged by Uber.

The bill would also require Uber and Lyft cars to be equipped with dome lights and taximeters, and would prohibit drivers from using a GPS to calculate distance and determine fares.

Uber spokeswoman Taylor Patterson said some communities have tried to enact similar rules, but none has been successful.

“We don’t believe it makes sense to regulate Uber in the same way as taxis,” she said. “We are not a taxi company. We are a technology company. It is a different model. Taxis have a fleet of vehicles. Uber and Lyft do not.”

Unlike Honolulu, most major cities limit the number of available taxicab licenses. Some cities operate on a medallion system, where taxi licenses can cost $500,000 or more. Cab drivers across the nation have complained that while they are burdened with expensive regulations, ride-hailing companies are allowed to operate with little or no government oversight. On Wednesday, taxi and limousine drivers in Philadelphia were the latest to protest, blocking traffic during a demonstration against Uber and Lyft.

Typically, state and local governments have tried to regulate ride-hailing companies by imposing fingerprinting, stricter background checks or commercial insurance requirements.

On several occasions, Uber and Lyft have responded to increased regulations by pulling out of markets, leaving angry drivers and customers to complain to politicians.

“They have their playbook down pretty set when these things happen,” Campbell said. “They are able to drum up passenger support in an instant.”

Cara Sadira, who has been driving for Uber in Honolulu since September, has confidence the company will protect drivers.

“I feel like Uber is a huge company and trust they will be able to take care of the things that they need to take care of so their independent contractors can keep driving,” Sadira said.

Howard Higa, owner of TheCab, Hawaii’s largest taxi company, said if Uber leaves town, “their drivers can work for another cab company or for themselves.”

“Uber is taking away jobs from people who are trying to be professional cab drivers,” Higa said. “They’ve made a substantial cut to our business.”

While cab companies want to impose restrictions on Uber and Lyft, city administrators say they want to hear from all sides, including consumers, before striking a balance between safety, new technology and competition.

“The city’s position is the public — residents and tourists — have apps on their phones and like the services that they provide,” said city Transportation Services Director Michael Formby. “Basically, we want to guide the conversation in favor of less regulation versus more regulation.”

Robert Deluze, owner of Robert’s Taxi, said Uber will be a powerful force during those conversations because it “has a great mechanism to reach people through social media,” adding, “The taxi industry is not culturally social media friendly. Uber uses social media to bully politicians.”

Still, Deluze said he doubts there would be significant political fallout if the ride-hailing companies left Honolulu.

“I don’t see Uber having an effect on an actual Hawaii election,” he said. “Many of the people that use Uber aren’t from Hawaii and don’t vote. At the end of the day, local people tend to support local.”

David Jung, owner of EcoCab, said because Honolulu doesn’t have medallions or caps on the number of taxi licenses available, the city is in a good position to require ride-hailing companies to abide by taxi regulations.

In communities where licenses are limited and medallions are considered major financial investments, Uber has successfully argued that it can’t enter the market as taxis, Jung said.

Instead, cities have had to develop new regulations for ride-hailing companies “since they couldn’t add Uber to a constrained taxi system,” he said. “If they got rid of the medallions they’d have lawsuits. In these jurisdictions, the taxi industries are the biggest impediment to change.”

Here, the taxi industry is in favor of changing some regulations. Bill 85 would change the rules to:

>> Allow cab drivers to charge passengers a cleaning fee for “the discharge of bodily fluid” or spilled food or drink, as well as a fee for the amount of time the cab is out of service because of spills.

>> Allow taxi companies to adjust fares, fees and rates for “different types and ages of vehicles and may include any costs of doing business, including fees and taxes imposed by governmental entities.”

>> Allow taxi companies or drivers to add a surcharge of up to twice the standard rate for night trips, special events and state holidays.

Although Deluze, of Robert’s Taxi, said “all of the taxi companies were in on this bill,” he does not support surge pricing or adjustable rates, which he described as “price gouging.”

“We’ve never done that and we shouldn’t start,” he said. “We are grumbling about Uber doing it and then we want to do the same thing. No way would I support that.”

City Customer Services Director Sheri Kajiwara, whose department oversees taxicabs, said variable rates would be particularly hard to enforce.

“Price surging will make it more difficult to manage with cabs, especially if they are not using GPS,” she said. “Right now the maximum price is widely known. I’m not sure how we would communicate the variables.”

Sen. Lorraine Inouye (D-Hilo), chairwoman of the Senate’s transportation committee, said ride-hailing oversight is best left to the state rather than the city.

“I think a free market with different products and pricing is in the best interest of the consumers. There should be regulations, but they should be different than for taxicabs and they should be consistent statewide,” Inouye said. “Also, I have some concerns about the city’s taxicab oversight. Background checks and other enforcement should be tougher.”

City background checks go back only two years and are limited to Hawaii convictions.

Inouye said she plans to introduce legislation proposing state guidelines for ride-hailing and mandating tougher city oversight for taxicabs.