Uber Under Fire in Hawaii

Hawaii lawmakers are mulling a bill that would regulate "transportation network companies" like Uber and Lyft. And while the legislator who introduced the bill, Sen. Glenn Wakai, says he introduced it on behalf of Uber, Uber testified against the proposed law. [Update: See below.]

The bill also assigns the Public Utilities Commission the role of regulator, an assignment the PUC says "raises some concerns."

Senate Bill 1280 sets Uber and its app-powered kin apart from taxi services, establishes requirements for insurance, and sets standards for drivers and vehicles, among other things. It would prevent transportation network companies from operating in Hawaii without first securing a $5,000 permit.

Brian Hughes, Associate General Manager at Uber in Hawaii, testified that the proposed law "places unnecessary and burdensome requirements on Transportation Network Companies here in Hawaii."

Hughes points out that the insurance requirement set by SB1280 are more strict than the requirements established for taxi operators.

Meanwhile, newly appointed PUC Chair Randy Iwase points out that companies like Uber and Lyft "engage in similar activities and provide similar services as taxicabs," which are regulated at the county level. He added that "some of the requirements that the Commission would be tasked with verifying are unlike anything the Commission currently oversees."

Iwase outlined some of the tasks the bill assigns to the PUC, noting that "the Commission will need additional staffing and funding to develop the administrative rules, personnel, and practices to meaningfully enforce this chapter."

Despite these concerns -- raised by both the supposed beneficiary of the law and the agency expected to enforce it -- SB1280 was passed by both the Committee on Commerce and Consumer Protection and the Committee on Transportation last month, and made it through the critical Committee on Ways and Means yesterday.

Its passage prompted Uber's local managers to urge users to "Speak Up, Save Uber Hawaii," and to launch a #HawaiiNeedsUber hashtag campaign. Not surprisingly, supporters don't see SB1280 as helping these disruptive transportation companies, but rather an attempt to kill them... driven by entrenched and outdated taxi companies.

"Let's face it," tweets Richard Padilla. "Frank Delima and that cab company just aren't that modern anymore and cab experiences are terrible."

Tara Coomans adds, "Let's make innovation and self employment easier in Hawaii, not harder." Her comment echoes testimony from Hughes, saying, "we are offering entrepreneurial opportunities for thousands of people with flexible hours... parents whose kids are in school, transitioning veterans, people in between jobs and entrepreneurs saving up while they work on their dream."

"Uber is not opposed to regulations," writes Hughes. "In fact, we are strongly in favor of a new framework that would recognize unique aspects of TNCs and create a new solution that embraces this technology."

To be sure, the bill has its supporters. Most of the testimony in support of SB1280 comes from insurance companies (GEICO, USAA, State Farm, Liberty Mutual). They don't dislike Uber so much as "coverage gaps" that they say exist between a driver's personal insurance policy and a business insurance policy, or the lack of clarity in defining when a driver is working or not (is it when the app is launched, when a ride is accepted, or when a passenger is picked up?).

But Uber definitely has its critics. The most passionate testimony came from David Jung, General Manager of Eco Cab.

"Uber, high on venture capitalist steroid (money), has become the school yard bully on a national scale," Jung writes. "Their meteoric valuation has led them to feel that they're above the law."

He concludes: "I hope that our legislators and leaders have the intestinal fortitude to 'dare' go against such a powerful mainland interest, and the integrity to put Hawaii's public safety over politics and money."

UPDATE: Sen. Wakai responded to my tweet expressing surprise that he introduced SB1280 to help Uber, given the company's testimony in opposition. He says: "They gave me the language for the original bill. Lots more to discuss before people get too excited."