Panel gives preliminary OK to Uber bills

Two bills aimed at tweaking the yet-to-be-implemented ordinance regulating ride-hailing operations in the same manner as taxis got preliminary approvals from the Honolulu City Council Budget Committee on Wednesday despite opposition from companies on both sides of the issue as well as from the city administration.

The measures were introduced by Budget Chairwoman Ann Kobayashi in response to concerns raised by the recently enacted public transportation vehicle ordinance, scheduled to take effect Jan. 17. They now go back to the full Council for the second of three readings.

Bill 55 would delay the ordinance’s implementation until a time to be determined. It also would eliminate a “grandfather” clause in the ordinance that now allows drivers of traditional taxis to continue operating under their existing permits until they expire, instead of applying immediately for the new permits that mandate a seven-year federal background check.

While the new ordinance will impose many of the traditional taxi regulations on ride-hailing companies, also known as transportation network companies, or TNCs, Bill 56 would go even further by requiring the TNC drivers to adhere to the same rate ceilings as cabbies.

City Customer Services Director Sheri Kajiwara said her staff needs additional time not just to go through a thorough rule-making process, which would include public hearings, but also to get the affected drivers certified so that they are not operating illegally when the ordinance takes effect.

The Cab owner Howard Higa and EcoCab owner David Jung said they oppose Bill 55 because they think regulation of ride-hailing companies should not be delayed, while Bob Toyofuku, an Uber representative, said it would ensure all drivers are treated fairly.

Kajiwara opposed Bill 56.

“Administration feels that there is too much regulation on this industry,” Kajiwara said. “Administration supports moving toward allowing fares to be more regulated by industry competition and public demand as with all private businesses.”

But Higa urged Council members to support Bill 56 because it would all but eliminate surge pricing, the TNC practice of increasing prices when demand is high and the supply of drivers low. That gives Uber and Lyft an advantage over the taxi companies, he said.

Toyofuku said that even when there is surge-pricing, Uber is transparent about it. The company is instituting “upfront pricing,” which requires the estimate given to a passenger to be the actual fare.

Chelsea Harrison, senior policy communications manager for Lyft, also called for rejection of Bill 56. In a statement, she said: “Instead of rushing to pass regulations that could stifle this new service, we urge the Council to work with all stakeholders to ensure the rules allow ride-sharing to continue to grow.”

The Council passed Ordinance 16-25 (formerly Bill 36) on Aug. 3 and it became law after Honolulu Mayor Kirk Caldwell returned it unsigned on Aug. 17.