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Uber and Lyft enjoying success on the Big Island, but some taxi companies finding it hard to compete

Updated: 
November 3, 2017 - 12:11pm

Uber and Lyft have seemingly taken off since launching on Hawaii Island earlier this year, though some taxi drivers say the ride-hailing companies have hampered local cab business.

Uber and Lyft, called “taxi alternatives,” allow riders to connect with on-demand, freelance drivers via a smartphone application. They began operating on the island in late March.

An estimated 30 to 40 people islandwide now work as Uber drivers, said Mountain View-based Uber driver Daniel Sai on Wednesday, based on the number of drivers he says regularly appear on the app.

Sai said he began driving for Uber four months ago during a temporary medical leave from his regular job. He has since driven more than 1,500 riders and earns $750 to $1,400 per week.

“Now that I’m better, I have the option to go back (to work), but it can’t really compare to what I can make (through Uber),” Sai said, adding about 60 percent of East Hawaii riders are residents and 40 percent visitors. “If you treat it like a full-time job, there’s a decent living to be made doing it.”

Hilo-based driver Mel Medeiros, who drives for both companies, also said business is good — he collectively serves about 75 riders per week, mostly through Uber.

Medeiros said the number of riders can be “sporadic” at times, but “I don’t think it’s come near its potential.”

However, some taxi drivers said Uber and Lyft’s lack of regulation allows them to offer lower fares and has made it difficult to compete. Laurie Elizares, owner of Shaka Taxi & Tours in Hilo, said the number of Shaka Taxi riders has dropped about 75 percent since Uber and Lyft arrived.

As a result, Elizares said she also has become a driver through Uber and now offers rides both ways. She said fares are lower through Uber but not as much as people think: During many trips around Hilo, riders “save between 75 cents and $3 by taking Uber over a taxi.”

“We’d rather be taxi drivers, but because no one (was) calling us, we had to join Uber, too,” Elizares said. “There’s more business (through Uber), but less profit.”

Pachy Duff, owner of Hilo taxi company Pachy Taxi, said Wednesday more taxi drivers now serve airport arrivals. Pickup at state airports requires an additional ground transportation permit that ride-hailing drivers told the Tribune-Herald they’re not yet able to get via their parent company.

Duff said he thinks ride-hailing drivers also have an unfair advantage. Taxi fares are regulated, he said, whereas Uber drivers can offer discounts or raise prices during peak times. He said cab drivers also face additional costs: He pays about $3,000 annually just for taxi insurance.

“We’re not supposed to discount except for elderly and students and disabled (riders), so we’re sort of stuck,” Duff said. “Whereas these guys basically get to go to Kona for half of what we do … so the undercut is huge.”

Duff also said he is concerned about the “long-term (outlook) for the taxi industry.”

“Just this morning, I had a message from a client saying, ‘We’re going to use Uber to go one place and use you to go back,’” Duff said. “So it’s cutthroat.”

An employee with Kwiki Taxi, which participates in the county Mass Transit Agency’s shared-ride taxi coupon program, said Wednesday that Kwiki’s business hasn’t dropped. Rides still are generally cheaper through the coupon program than with Uber or Lyft.

Uber and Lyft have impacted taxi industries elsewhere: The number of taxi trips arranged in advance in Los Angeles dropped 42 percent between 2013 and 2016, the Los Angeles Times reported, and the number of total trips dropped almost 30 percent.

In early 2016, Yellow Cab Cooperative, the largest taxi company in San Francisco, filed for chapter 11 bankruptcy.

Some jurisdictions such as Honolulu passed measures placing additional requirements on Uber and Lyft drivers.

Honolulu’s ordinance places ride-hailing drivers in the same “private transportation” category as taxi drivers. It also requires drivers to pass a more extensive third-party background check and requires those who offer pick-up and drop-off airport service to have a commercial service permit.

Currently, Hawaii Island ride-hailing drivers simply must pass a background check, have valid insurance and have a registered and inspected vehicle.

County leaders said this week the ride-hailing companies haven’t been discussed again since they first arrived in March.

Hilo Councilwoman Sue Lee Loy said she’s not aware of any complaints or reports of “unfavorable or negative impacts” about either Uber or Lyft but encourages residents with concerns to contact county council members.

Mayor Harry Kim met with representatives from Uber when the company first launched. He said he discussed with Uber the need to increase transportation for residents in rural areas such as Puna and Ka‘u and to include taxi drivers in the ongoing transit conversation.

Kim said Wednesday he has not met with Uber since.

“They thanked me for the information and (for pointing out) areas of need and said they would review it and see how they would service that area,” Kim said. “I’ve never had an update since then.”

Sai said ride-hailing drivers aren’t trying to “undermine (the cab) business” but give riders choices.

“Uber has simplified the whole process,” he said. “It cuts out the middle man. What they’re saying is, they’ve invested a lot of time and effort to get their permit and requirements and that’s their choice. We’re giving more options.”

“Nothing is stopping them from joining Uber and Lyft,” Medeiros added. “In every industry, I think competition is healthy if it helps the customer.”

At 3 p.m. Thursday, a ride from Hilo Farmers Market to Hilo International Airport was quoted at about $15 through a local cab company, $11.77 through Uber and $12.73 through Lyft.

Email Kirsten Johnson at kjohnson@hawaiitribune-herald.com.

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