Bill to regulate Uber is passed

The Honolulu City Council voted 8-1 Wednesday to approve a bill that imposes new regulations on operators of Uber, Lyft and other ride-hailing vehicles and, to a lesser extent, traditional taxicab drivers.

Leaders on both sides of the taxi versus ride-hailing debate voiced displeasure with the final version of Bill 36. Even city Customer Services Director Sheri Kajiwara, who had been working with the Council for months on crafting the measure, urged members to defer it so the public could digest last-minute changes.

It was unclear whether Mayor Kirk Caldwell would sign the measure. A spokesman said late Wednesday it is “under review.”

The law would take effect Jan. 15. Councilwoman Ann Kobayashi, the bill’s author, said that would allow additional laws to be enacted, such as rules on fare rates for ride-hailing companies.

Ride-hailing companies are also known as “transportation network companies,” or TNCs. Taxicab drivers and companies pushed for legislation, arguing that the lack of government regulation on ride-hailing companies has given them an unfair advantage and caused taxi businesses to suffer.

But the ride-sharing companies argued that imposing additional regulations would upset their business model and discourage many of their current drivers from operating.

Uber Hawaii General Manager Brian Hughes told reporters after the meeting that his company was disappointed with the vote.

“We think it only serves to hurt Hawaii residents and visitors alike, and is likely to set back the economic opportunities of thousands of people in Honolulu county,” Hughes said.

Uber officials had threatened to leave Oahu if the the bill was passed. On Wednesday, Hughes said, “It remains to be seen as we observe the implementation of this law.” Uber will also try to continue talking to city leaders about other changes, he said.

Uber has more than 5,000 drivers on Oahu, Hughes said. He declined to give an estimate of how many drivers he expected to lose as a result of the law.

Hughes said drivers are most concerned about “red tape” provisions that would discourage drivers, such as requiring their vehicles be altered permanently for identification purposes.

Chelsea Wilson, Lyft senior policy communications manager, issued a statement voicing similar displeasure. “Requiring part-time drivers to comply with unnecessary rules and costly licensing processes forces ride-sharing into one-size-fits-all taxi regulations,” the statement said.

“As the Council members themselves recognized, there are numerous issues with the language passed today that must be resolved before implementation,” she said. “We urge the Council to continue working with all stakeholders to revise the bill and keep modern, innovative transportation options like Lyft on Oahu.”

Howard Higa, president of The Cab, said that he and his drivers are in favor of most of the provisions in the bill, although he told Council members to reject it. “I believe it’s going in the right direction,” he said. Their chief concern was that the latest draft does not address “surge pricing,” the practice of increasing rates at times when ride-hailing vehicles or taxis are difficult to find.

“For the cab business, all the prices are set by the (city),” Higa said. “We have a meter and that’s what it is.”

Kobayashi said during the meeting that rates would be addressed in a separate bill.

EcoCab owner David Jung urged both sides to support the bill. The bill still does not provide “a level playing field” and still leaves ride-hailing companies with an advantage, he said. “But this is a journey of a thousand miles and it begins with the first step.”

Jung said the passion of ride-hailing drivers and taxi operators are similar.

“Let’s join together,” he said. “The bill as it stands now, it’s not a high bar, it’s a minimal bar. It’s a couple of tests, it’s putting some identifiers on your vehicle so that the airport and other law enforcement officers can identify you when you’re on the road. It’s not that big. Don’t get intimidated by these requirements. They’re not that bad.”

Kobayashi, in urging colleagues to support the bill, said the main point of the bill was to ensure the safety of passengers picked up by both types of companies. She acknowledged the difficulty with coming up with a bill “because, as you can tell, no one really likes it.”

She added: “We’re not regulating businesses, we’re certifying drivers and their vehicles.”

Councilman Brandon Elefante cast the lone no vote, arguing that there should be separate laws regulating ride-hailing and taxi operations. Elefante said the bill also contains other provisions that are problematic.