Rather than looking to regulate ride-booking companies such as Uber and Lyft like conventional taxi companies, state lawmakers should be trying to lift some of the rules that help make driving a regular cab such a tough way to make a living.
The state House Transportation Committee had two roads to travel in deciding how so-called "transportation network companies" should operate in Hawaii, and unfortunately it chose the more predictable path.
The committee deferred House Bill 1287, elements of which Uber executives say are essential to preserve the company’s viability in Hawaii, and moved forward with House Bill 1463, which acquiesces to taxi and insurance industry demands that the transportation innovators face the same requirements as heavily regulated taxi companies — rules that are guaranteed to drive up costs for customers.
Services such as Uber and Lyft let passengers use smartphone apps to find, book and pay for private car service provided by independent drivers, who drive their own cars and switch between personal and company-provided commercial insurance coverage, depending on whether they have a paying customer on board.
The head of Uber’s Hawaii operation says the company has contracted with hundreds of drivers on Oahu and Maui, and that the drivers’ ability to switch between insurance coverage is critical to the operation.
But the bill that would allow that to continue is the one that has been deferred. HB 1463, the one moving forward, would require ride-hailing services to use only commercial motor vehicle insurance, as required of regular cab companies, whose drivers also face physical tests and other requirements.
As David Jung, general manager of Eco Cab, told lawmakers, taxi companies and technology-driven ride-booking companies provide essentially the same service, and should follow the same rules.
"If we’re going to be required to jump through hoops … then everyone else should be," he argued.
It is understandable that cab companies feel threatened by the tech-company pioneers, and it is important to level the playing field so that neither holds an unfair competitive advantage.
Still, lawmakers should try harder to hammer out a compromise that does not deter innovation that serves passengers well, and drivers, too, according to legislative testimony.
The commercial insurance requirement might destroy the fledgling industry, which relies on independent contractors unlikely to fork over thousands of dollars a year for commercial insurance to cover what for many is part-time work.
Likewise, the parent companies will resist paying for commercial insurance while contractors are on personal time.
In seeking to regulate the ride-booking industry for the first time, lawmakers should heed the experiences of working people such as cabbie-turned-Uber driver Wesley Yamada, who testified to the House Transportation Committee that he can earn in eight or nine hours driving for Uber what it took him 12 to 15 hours to make driving a taxi — because of lower insurance costs and other fees.
Seeking to regulate similar industries equally should leave room to regulate all of them less.
