Supporters of Uber, a ride-hailing service that allows customers to use smartphones to contact independent drivers, rallied Thursday against the state Legislature’s first attempt to regulate the new industry.
A nearly equal number of Uber opponents turned out for a House Finance Committee hearing on a bill to regulate ride-hailing services.
Senate Bill 1280 would appropriate funds to the state Public Utilities Commission for the purpose of regulating transportation network companies and transportation network company drivers. It also would mandate that ride-hailing companies register as businesses with the Department of Commerce and Consumer Affairs. And, the bill would establish insurance requirements and qualifications for ride-hailing drivers.
The passionate response to the bill is similar to the debate over attempts to regulate the burgeoning vacation rental industry, which, like ride-hailing, pins its strong growth on an Internet-based business model that has fulfilled the consumer desire for more options.
There’s no denying that the incredible consumer demand for ride-hailing services like Uber and Lyft has provided full- and part-time jobs to Hawaii residents. However, increases in ride-hailing use have sparked attempts nationwide to better gauge whether transportation network companies create jobs, shift them or eliminate them.
Safety comparisons also are ongoing between ride-hailing companies, which mostly self-regulate, and taxis, shuttles and private cars, which fall under county and state regulations in Hawaii. Then there’s the issue of whether they have an unfair advantage over other, more heavily regulated transportation providers, who pay higher insurance rates, fees and taxes.
The House committee deferred decision-making on the bill until Tuesday.
Brian Hughes, Hawaii Uber general manager, said it’s critical that the bill doesn’t advance because meeting its onerous requirements and additional costs would regulate Uber out of Hawaii. The company supported an earlier version of the bill, which it said codified industry standards that have emerged in other locales such as Utah, Illinois, California, Colorado and Washington, D.C.
Since launching the service in Honolulu in the summer of 2013 and on Maui in December 2014, Uber has attracted a fair number of residents and visitors who are loyal to its cause.
Honolulu resident Kate Froemming, who uses Uber to get to and from the airport, said customer satisfaction inspired her to rally along with workers.
"It helps the community. It helps people. It’s a good thing," Froemming said. "I’ve had bad experiences with taxi drivers who didn’t know where they were going and charged a lot. Also, you can’t get large luggage into the bus. Consumers need choices."
Uber collected about 7,000 signatures from customers who support the company’s continuation in Hawaii.
State Public Utilities Commissioner Randy Iwase said his department thinks that ride-hailing should be regulated at the county level. However, if the state bill advances, Iwase said it should be retooled so that the commission would be able to revoke the initial permit, levy fines, assess penalties or issue citations.
Howard Higa, who owns TheCab, the largest cab company in Hawaii, said lawmakers should prevent ride-hailing companies from operating until suitable regulations are passed.
"At present the industry feels that transportation network companies are operating illegally. Until there is firm confirmation that they can abide by the laws of the industry and state, and keep the consumers safe, they should not be operating," Higa said.
Sandy Adams, a retired home inspector, said driving for Uber part time has cushioned her medical and mortgage payments. In her opinion, Uber has brought as many benefits to the state as it has to individual drivers.
"We all pay general excise taxes. If we get nixed out of here, the state will lose a bunch of revenues," Adams said.
But Higa said allowing ride-hailing companies to operate outside of county and state regulations risks the jobs of the 875 drivers and employees who work for TheCab on Oahu.
"Do we want to see hardworking drivers on the unemployment line or on welfare due to the transportation network companies that refuse to operate under our Hawaii laws and are so arrogant to continue to operate illegally and smirk at the law, lawmakers and the business owners that abide by the laws?" Higa said.
