Uber rejects regulatory bill ahead of Council action

Uber is threatening to pull out of Honolulu if a proposal passes that would require city-issued driver certificates for all who are interested in carrying the public.

Bill 36, CD 2, introduced by Ann Kobayashi, is slated for action during the Honolulu City Council’s Budget Committee’s meeting at 9 a.m. Wednesday at Honolulu Hale. The bill requires taxicab and ride-hailing drivers to obtain, for a fee, a city-issued certificate, which would become part of a database.

It stipulates drivers must submit to a third-party, nationwide criminal background check that goes back seven years. The bill implements new identification requirements for ride-hailing drivers. And it shifts most of the burden for certification to the companies themselves.

Kobayashi said the main impetus for the bill is to improve consumer safety while establishing regulatory parity.

“We want all drivers to be certified regardless of the company that they work for,” Kobayashi said. “We were trying to make a way to make it fair to both sides but all the while protecting the rider, the consumer.”

Kobayashi said her latest bill is broader than the current city background checks for taxi drivers, which go back only two years and are limited to Hawaii convictions. City regulators would conduct other screenings such as language and driving tests for one-person companies; however, Kobayashi said companies with more than one driver would do their own certifications.

Howard Higa, owner of TheCab, Hawaii’s largest taxi company, said requiring companies to test is like “putting the wolf in the henhouse.” Still, he said, he supports the bill because it’s “one of the first that seeks to regulate Uber and Lyft.”

Sheri Kajiwara, city director of customer services, said she supports the bill’s concept but is working with Kobayashi to amend the bill’s language, which does not address fare regulations for ride-hailing companies.

“This is one area that is crucial to establishing a level playing field within the industry. To protect the consumer, taxi fares are standardized, regulated and monitored,” Kajiwara said.

But Uber spokeswoman Tabatha Chow said the company would not be able to operate under Bill 36, which favors taxicabs.

“This approach seeks to fit a square peg into a round hole. The proposed framework does nothing to recognize that taxis and ride-sharing companies have different business models — a distinction which more than 40 other jurisdictions in the U.S. have embraced,” Chow said.

It’s not uncommon for Uber to oppose taxilike regulations and threaten to leave, said Harry Campbell, who operates therideshareguy.com blog and podcast.

“It’s a big challenge for regulators, especially when you have a product that so many constituents love,” he said. “They don’t pull out often, but when they do it’s swift.”

Campbell said Uber previously has left San Antonio; Broward County, Fla.; Buffalo, N.Y.; and the Hamptons on Long Island, N.Y.

Uber is facing tougher legislation elsewhere, said Dave Sutton, a spokesman for Who’s Driving You, a public safety campaign for the Taxicab, Limousine and Paratransit Association.

“They are against anything that requires a driver to interact with the government. There have been many stories written about their threats to pull out, but I don’t think they would abandon Honolulu over this,” Sutton said. “What’s being proposed is another bill that codifies Uber’s business operations.”