Update: This article has been updated to include statements from Uber, which provided responses after this article’s original publication.
KAILUA-KONA — Ian Work’s phone rang mid-interview.
He took the call while Kelly Williams, with whom he owns World’s Coolest Cab, spoke about the drop in cross-town rides they’ve experienced since Uber and Lyft entered the market 20 months ago. Work came back about 90 seconds later and apologized.
“As much as I’d like to just ignore this stuff, I can’t turn down — there’s another $40 there,” he said.
“Perfect,” Williams said to Work, “thank you.”
These days, many taxicab companies have to take the hails they can get. Ever since Uber and Lyft came into the local market in March 2017, some Hawaii Island taxicab drivers say they’re being put at an unfair disadvantage.
It’s an issue communities have faced throughout the country as ridesharing has upended traditional transportation companies, and between a local fare schedule that hasn’t changed in a decade and a lack of regulations specifically aimed at Uber and Lyft (which are considered transportation network companies and not taxi companies), long-time taxicab drivers are feeling the pressure.
“Our county is not benefiting from this in the least,” said Williams. “ … there will be a significant amount of drivers who don’t have anything else to fall back on, and those drivers, once they’re put out of business, will be on public assistance.”
Defining rides by rules
Transportation network companies are regulated under Hawaii’s insurance code, which sets insurance requirements for transportation network companies and drivers, as well as any local ordinances specifically regulating transportation network companies.
But the phrase “transportation network company” doesn’t appear once in the Hawaii County Code’s chapter on public transportation, the chapter that regulates taxicabs, school buses and the public transit system.
That’s in contrast to the revised ordinances of Honolulu, which explicitly defines the term and sets a number of standards for operators, including limiting passengers to the number of seat belts in the vehicle and restricting drivers from smoking in their vehicle with passengers inside.
It’s a situation that has some taxicab drivers feeling like they’re being run out of business by competitors who on the one hand aren’t subject to the upfront investment and annual fees taxicab drivers face and on the other aren’t restricted to the fixed fare rates that haven’t changed in a decade.
“It’s unfair. They’re not held to the same set of rules that we are,” said Work. “In fact, they’re held to no rules.”
Details of the dispute
Nathan Hambley, a spokesperson for Uber, said there are typically more than 100 active drivers every week in and around Kailua-Kona and close to 200 throughout the island. Service is typically available 24/7 islandwide with an average wait time of about 6 minutes.
But examples are plenty of the rules taxi cab drivers say rideshare drivers are breaking. Examples abound, too, of rideshares not having to follow the same requirements as taxis, which they say gives their competition an unfair advantage.
Victor Quiros, owner of A1 Taxi, pointed to the use of dome lights by some Uber and Lyft drivers, noting a county statute that prohibits anybody without a valid taxicab license from displaying “any sign, light or other device that identifies such motor vehicle as a taxicab.”
He also said drivers are reaping the benefits that should be reserved for taxis by picking up rides that weren’t prearranged or picking up roadside hails.
That’s not allowed in the rideshare model of operation.
A spokesperson for Lyft said the Lyft Amp, which sits on the dashboard (not the roof) “is the only sanctioned communication device that Lyft offers to drivers and any other light or device is not encouraged for use by Lyft.”
She also said riders looking to take a Lyft can’t hail rides and drivers are prohibited from accepting street hails.
Hambley said rides for Uber “must be accepted through the app,” and that drivers who use the app are responsibile for following local law and are required to “maintain high standards of professionalism, service and courtesy at all times.”
Jared Keanaaina, who drove for Uber for a couple months last year, said it’s not uncommon, though, for drivers to give rides to passengers outside of the platform.
“Every Uber driver I knew, which was about six or seven of them, would do it outside,” he said.
He said it was often initiated by passengers who would ask if they could request their driver for a future ride. Because the app doesn’t allow users to request a specific driver, drivers would give passengers their phone number for future rides.
That was also helpful for passengers who would need return rides back from places where there might not be many drivers in the area.
But taxicab drivers also said Lyft and Uber vehicles are using parking stalls on Alii Drive that are reserved exclusively for taxicabs during part of the day even though taxi owners pay annually for a taxicab license that permits use of the stalls.
“We pay the Mass Transit — each one is $120. Times 100 taxis, that’s $12,000 we pay for these stalls,” Quiros said. “They’re paying zero dollars.”
Williams and Work also argued that taking a taxicab supports a local business versus Lyft and Uber, which are both headquartered in San Francisco.
“I’ve been here 14 years, I knew after a year or two, I could understand why it was important that you spend money locally, that you invest in your local economy,” Work said. “We’re kind of all in this together. We’re out here way away from everything else, we’ve kind of got to make things work on our own.”
Burdensome taxi startup costs?
Even starting with a car in “pristine condition,” Williams said, a taxicab operator is looking at hundreds of dollars in startup costs for the meter, top light and lettering. Considering the cost of a used vehicle and work needed to get it into good condition, she said, an operator can expect to pay $10,000.
Taxicab owners and drivers also have to navigate a series of paperwork, applications and a public hearing before they can even accept their first passenger.
In addition to the equipment requirements like installing and calibrating a meter, each vehicle requires a thorough inspection and a certificate from the Hawaii County Transportation Commission, which can only be granted after a public hearing determining that “public convenience and necessity” require the operation of a taxi. Taxicab owners can then get a license for the vehicle, which must be renewed annually at a cost of $120.
Even to operate a taxi, a driver needs to submit a 10-year background check from the courthouse, a seven-year driver’s abstract and a doctor’s clearance and also must pass a test assessing their ability to navigate the area and knowledge of taxi regulations. Then, Williams said, the driver pays $10 for their own personal license.
Taxicab drivers are also bound to charging rates fixed in statute: $3 for the start of a ride and first eighth of a mile or minute of waiting/elapsed time and 40 cents for each additional eighth of a mile and additional minute of waiting or elapsed time. Taxicab drivers may also charge $1 a piece for most types of baggage.
Those fees were set in 2008, when the county council last raised rates. And despite the county council also adding language to allow for an annual review of fares to determine whether they should be raised or lowered, that too has never happened.
Uber and Lyft drivers meanwhile aren’t subject to charging those fixed rates.
“Why do I have to always charge the same amount?” asked Work. “If I charge a different amount it’s either fraud or tax evasion depending on which way I go, but they can change their rate whenever they want.”
County looking at options
Hawaii County Mayor Harry Kim said he’s heard some of taxicab drivers’ concerns and said he spoke to Uber representatives when they were first trying to enter the local market. He said he originally sensed “a little bit of unfairness” to taxi companies given the heavy regulations they face that companies like Uber and Lyft aren’t subject to.
“So I told them I’m sure that’s going to bring on problems,” he said.
Kim said a staff member in his office is looking at how Oahu has approached the issue to determine where Hawaii County can find a blueprint.
“It’s the same thing I did in regards to vacation rentals,” he said. “We checked Maui, Kauai and Oahu and steal the best from all of them and learn from the best of all of them and make our own. It took us a long time to get here, but we’re getting there, and likewise with Uber, we’ll learn from others.”
Honolulu Mayor Kirk Caldwell in June vetoed a bill that would have capped surge pricing by Uber and Lyft, according to a Honolulu Star-Advertiser report at the time. An alternative from the mayor proposed reducing regulations on traditional taxis so they could run similarly to Uber and Lyft drivers.
A separate bill, introduced by Honolulu Councilman Trevor Ozawa, would require all private transportation companies that set a total fare disclose the amount to passengers before confirming the ride, the Honolulu newspaper reported.
As this county looks at the options, Kim said it’s unlikely there will be a single set of rules applying uniformly to taxicab drivers and Uber/Lyft drivers.
“It is not going to be by the same rules, because otherwise they will be just another taxi business,” he said. “And I just want to make sure it’s as fair as possible.”
Remember:
need to keep those “once hired, can’t be fired” goberment folk in Hilo, etc
coming to work…occasionally..
….” Taxicab owners and drivers also have to navigate a series of paperwork,
……applications and a public hearing before they can even accept their first passenger”
and, of course, they know all, see all and are brighter than the average gecko
…”..rates fixed in stature:..”
can’t have folk actually “competing”
all that is pure BS about the paperwork-easy as hell getting a taxi lic.
The problem is not Uber or Lyft, it is, as described in this story, the government-created burdensome regulations on taxis. Deregulate and consumers and taxi drivers win. Keep the regulations, and consumer will always vote with their pocketbook and choose the best, most efficient methods of transport, and that, for now, are Uber and Lyft. Over-regulate these companies (to protect a small number of taxi drivers/companies) and consumers lose.
Kim boy is just in it for the money as is all the guberment gougers
Hope they go out of business Soon!!!!!
Remember how Hawaiian Airlines played the same game when go tried to break in to the market (this is not fair..)? Well we fell for it that time and now we are paying 50% more than we should for inter island trips.
We should be expanding Lyft and Uber. (Let them pick up at the airport) Many advantages: 1) Good for public safety and reducing DUI’s, 2) Less expensive for the general public to get to and from the Airport 3) If it catches on there will be less traffic. 4) It would probably be cheaper than our current bus system for many rides.
The last two times that I took a taxi to the airport were terrible experiences. The firs time, the driver announced that he wasn’t going to use the meter and charged a flat fee, which was’t cheap. The second time the shady driver charged $2 per bag, and he didn’t even help me put them in the van. Then, when my wife was paying him he pulled the old “you shorted me $10”. We counted the cash sitting in the back seat during the ride. Never had anything like this with Uber, it’s much less expensive, you know what you are paying up front and you don’t need to pay the shady driver cash. I hope our corrupt politicians don’t push Uber and Lyft out.
The buggy whip manufacturers complained about to car manufactures too….unfair!
I grew up in NYC with the horrid Yellow Taxi monopoly run by the City Taxi Commission. The medallions (taxi licenses) were purposely limited to jack up the value. This created plenty of graft and corruption, while the taxi serve was notoriously poor. Open up the market and create competition and transparency……life gets better. Next school choice and privatize the postal system!
kona taxis been ripping off the public for years now there whining because another player has come to town-I have no sympathy for them try lowering your rates
Per this article, cab drivers have to pay all these costs upfront for the right to drive. That seems fundamentally unjust. In addition, taxis do not have access to the same logistics technology offered by the platform. One possibility being looked at by New York City Taxi and Limousing Commission is to tax Ueber type vehicles in proportion to fares so that costs end up equal. This would still not make it fair, because the technology of Ueber and Lyft is so much more powerful than the old “call cab by phone” method. And, as the article points out, repeat users do not have to rely on the platform.
Taxis should go extinct if they don’t offer “a better mousetrap” as Uber and Lyft have. Protecting them is waste of government resources because they are bound to wither in a competitive and open marketplace.
I’d rather look at this from the consumers’ point of view: what is the most efficient and least costly way to get form A to B? That’s why I avoid cabs and use Uber whenever possible.
I’m sorry that driving a cab, Uber or Lyft is not a gig/job that pays very well, but that’s what you get when you have a low barrier to entry job that requires no special skills or no education, not even a high school diploma.
The government should not be in the business of setting prices on transportation services; that’s what enabled the visionaries at Lyft and Uber to build a better service for less costs than the grossly inefficient and costly (highly regulated) cab services. In the end, government over-regulation of Uber/Lyft will just prolong the inevitable decline in traditional cabs.
So the question is whether there is something in the taxi business model that we, as a society, think is worth protecting? The taxi drivers need to make their case, and they need to make it quickly. For example, many hotels provide their employees a living wage with benefits while most AirBnB owners do not pay their cleaners and landscapers more than substandard hourly wages while often not even paying taxes. So there is something equivalent to a living wage with benefits in taxi cab services that we may want to protect, simply for the sake of social stability? Low skills or no education describes most of the jobs in a tourist economy and not all of us subscribe to social darwinism.
Alex, I think your analysis is essentially right: Is there something in the traditional taxi industry worth protecting? That’s really the question because, on its own, without some regulatory interventions, the industry, as it is today, will continue to wither.
I do think you are a bit Pollyanna-ish about hotels with living wages; that’s what the unionized hotel workers in Honolulu (and in the past Kona) are striking about: they don’t receive a living wage.
But, I ask, is it the government’s responsibility to ensure living wages from a single low/no-skill job? Or, any job for that matter? If so, there is a cost to government controlled labor markets, and those costs result in huge inefficiencies and higher costs for everyone else.
Many fast food restaurants will be greatly reducing their workforce with touch-screen ordering and robots doing the cooking. Hotel workers will see their jobs decreasing as robots begin to do laundry and cleaning tasks. Driveless cars will likely replace taxi drivers and Uber/Lyft drivers in the not-so-distant future. These are inevitable, so do we try to maintain old, inefficient systems or focus on letting these changes happen (as they surely will) and transition these workers to other parts of the economy?
You mention social stability. I’d argue that just like a boat, we’re most stable when moving forward. I do believe, though, that you are asking the right questions. We might just disagree on the answers.
You raise some good points regarding the role of government in the economy.
A society committed to freedom and equality might not actually want to save such jobs. Ideally, the stunning productivity gains promised by new technologies like Ueber and AirBnB could reduce society’s need for work that is deadening to the human spirit.
But without far-reaching changes to our social safety net, doing so will render millions of us destitute. I worry that such a crisis in the low-wage labor market is close on the horizon, and that society is unprepared to deal with it. AirBnB and Ueber are taking commercialization of their respective sectors, transportation and hospitality, to a whole new level. That is great for consumers, but who will take care of and protect those who get maimed in the process? Those without the competitive skills, proper nutrition, support, and education may never make it to the playing field. Society will never benefit from their valuable skills. In the short term, inequality may seem to be in the best interest of our society. In the long term, inequality will limit diversity and the innovation it creates.
We just view the world differently.
I believe in equality of opportunity, which I know we have not obtained (it’s an ideal, not a reality), not equality of outcomes (income equality).
One (yours, I believe) views government as necessary and important to assure some level of equality of outcomes, so the government can and should tilt the playing field to benefit those who have not achieved sufficient means.
In the case of the traditional taxis, which have become highly inefficient and not competitive in the modern marketplace (just look at the universal disdain for them in the comments to this story), one idea is to believe that we should bring down (regulate) the Uber/Lyfts to bring up the taxis. That seems to me a horrible way to foster innovation and efficiency. The marketplace makes winners and losers, and governments make a terrible mess of things when they try to chose who wins and loses, especially in industries that have outlived their usefulness.
You often mention AirBnBs, but fail to see that they are the best way to let small investors make and keep additional income. That money does not go to off-island owned hotels; if the owner is here, that money stays on island. I spent some time in Honolulu this summer and the $1500 I spent at an AirBnB that went to the on-island owner of the condo. If I went to the Hilton, all of that, with the exception of hotel staff costs, would have left Hawaii. So, my decision kept probably $1,000 more in Hawaii than the hotel. (I also exclusively used Ubers!)
I respectfully disagree that current business models limit diversity and innovations. The simple existence of Uber/Lyft and AirBnB show that we’re at a time of wonderful innovation and opportunities. Sure, things are unequal, but they always have been, and always will be.
If you want to guarantee outcomes (the income inequality debate), you will severely restrict innovation and have the government micro-managing business and the economy. Work on improving equality of opportunity and we’ll all win.
I think you misunderstand. I am not saying that we should necessarily protect traditional taxis. I think, this being Hawai’i and not the mainland, we do have an an obligation to protect low wage jobs from predatory Silicon Valley business models such as Ueber and AirBnB until the day we have a real social safety net in place. (Like Sweden or Norway.) Not necessarily protect the existing taxi business model “as is”. To me, these are two different things. Have you noticed how homelessness has increased everywhere? we can’t just kick the can down the roadside, because there is a direct link between these companies and the deterioriation of our neighborhoods and our social fabric.
I’d love to take the AirBnB argument up with you in a separate thread, because AirBnB is far more impactful than Ueber — it illegally gentrifies entire residential neighborhoods. By some estimates, it has taken 40,000 housing units out of the housing stock across Hawai’i. If you are interested, please take me up on it … I am actually in a position to walk you through some real scenarios here on the island and show the impact first hand.
There is nothing worth saving in the taxi industry. Riding a taxi is a bad experience and also very expensive. We usually have to pay $50 to get back home from the airport and we live in town. An Uber is about 1/2 that and the drivers are doing fine from what they tell me. Riding a taxi you always feel like you are being taken advantage of, especially if you aren’t from the area. It’s just a horrible experience that has to go. Harry is an idiot if goes after them like he did vacation rentals. That guy needs to retire to his rocking chair.
Big Mac — there is no question that Ueber has improved consumer welfare. It eradicated high search costs, leading to a much more efficient market. It probably reduces drunk driving and reduces consumer incentive to buy or rent cars.
But a study by the university of Chicago has found social costs of Ueber:
Its longer term impact on labor standards is unclear; it may have dark implications on the future of low wage work.
Its drivers are often unsafe or underinsured
It may invade customers privacy by keeping ride data
It is undermining working standards for taxi drivers
It disregards existing laws when convenient
Good points, Alex, but don’t they all (except data privacy) apply to taxi cabs, too?
Taxi driving has mostly been a long hours, low pay job, and Uber/Lyft are no different. It’s a low skill and low barrier to entry job with an abundant supply of workers–the perfect recipe for low pay and poor conditions.
At least with Uber/Lyft, the consumer (and the drivers) have a very high degree of accountability and security with GPS tracking, cashless billing and a rating system to keep out the bad apples. Not perfect, but far better than the traditional model for taxis where there is no accountability, rampant fraud and, I’d suspect, tax evasion.
I have has bad taxi drivers coming into town so don’t hand me that uber/lyft drivers are bad. I have never had a uber/lyft driver as bad as a regular taxi driver. also you can not block drivers in a taxi as you can if you have a bad experience with uber/lyft. So it is much safer. If I have to take a cab I no longer tip.
Taxi drivers disregard existing laws all the time. The driver that took me to the airport turned off his meter and said he would be charging a flat fee and his POS van had a transmission going out. There is plenty of competition for Uber. Why should we as consumers be charged outrageous taxi fares when other companies will gladly do it for half the price? Why can’t taxi’s adapt and compete? Their current business model is obsolete and we shouldn’t have to suffer through it because corrupt politicians protect them.
Uber and Lyft DO sneak into Kona airport . I’ve heard that they take
their signs off to drop off , but they can’t pick up , as they would be
more likely to be noticed waiting around and greeting , trying to act
like ‘friends’ at the terminal curbside where everybody’s watching . To
get an Uber at the airport the customer has to hike up to the top of
Keahole street to the highway . Causing the slogan ” I’d walk a mile for an Uber ” In Kona you have to . Is it worth it ?
Give me an fn break nobody likes getting ripped off( who the in the hell would pay $40 for a $12 dollar ride. Taxi drivers have no accountability for their driving and experience given to the rider since there is no way to rate them. That’s why most of the time you see them speeding cutting people off running red lights basically causing accidents because they do not know how to drive!!!!!!!!!!!!!!!!!!!!!!!!
I happen to drive for Uber and Lyft in the Los Angeles Market. I honestly don’t see how or why taxi cab drivers continue to drive for taxi cab companies with the regulations and cost to the passenger. They could easily convert their cab to an Uber vehicle and drive for Uber Lyft. So quit complaining and consider changing your way of doing business. Yay for Uber and Lyft who are helping low to middle class persons meet their transportation needs at a reasonable cost. A taxi cost you $20 to come up to your door before you even travel an inch. How fair is that to Consumers? It is not. That is why the taxicab industry is failing. Again, considered driving for Uber and Lyft.
Aww poor corrupt taxis. They believe that they are the only industry who shouldn’t have competition. All these decades of treating people poorly and gouging prices, taxis are finally getting their come-uppance.
Ever rode a taxi from Kona Airport? They drive reckless and too expensive, cheaper to rent a car or use Uber and/or Lyft. Quit the taxi and become an Uber or Lyft driver, simple solution.
Let the cab companies die. There have been many a night I called the cab companies (including Coolest Cab) and they said they were not working any more tonight. This was because these cab drivers gouged enough people during the day to allow them to not provide service at night. This forces people out on the street driving when they have had too much to drink. No we can go out and have a good time and get a ride home at a reasonable cost. Shame on them!
Another way to drive tourist out of town you dumb ass Kim!