Hawaii lawmakers tried to learn more Wednesday about Lyft and UberX, two popular ride-sharing services that have been transporting people in and around Honolulu since June to the chagrin of taxi drivers who say they are skirting the law and creating unfair competition.

State regulators believe the companies — both of which are rapidly growing Silicon Valley mobile tech startups — need to stop providing their ride-sharing services in Hawaii until they come into compliance with the law.

It’s unclear what exactly that entails though because their services are so new and the state has not kept pace. It could mean getting a license with the county if they are exempt from the Public Utilities Commission’s oversight like taxicabs. Or it could mean getting a state permit if they are considered a “transportation network company.”

Hawaii House lawmakers, on left, listen to the state insurance commissioner and Lyft and Uber representatives during an informational briefing Wednesday at the Capitol.

Nathan Eagle/Civil Beat

Either way, PUC Chair Mina Morita said Lyft and UberX are currently operating outside the law.

Lyft and Uber representatives endeavored to assure the four House reps who showed up for the informational briefing at the Capitol that they were operating aboveboard, but it was obvious not all were convinced. 

State Rep. Angus McKelvey, who chairs the Committee on Consumer Protection and Commerce, grilled them over their practice of doubling rates when demand spikes beyond the available supply of vehicles and questioned whether the drivers and companies carried the necessary insurance. 

State Office of Consumer Protection Executive Director Bruce Kim and Insurance Commissioner Gordon Ito said they have many concerns about the way the two companies have been operating, some of which may lead the Legislature to play a more direct role.

Rep. Ryan Yamane, who chairs the Transportation Committee, said the state needs to get involved and provide direction. 

But between now and the next legislative session, which starts in January, it looks like UberX and Lyft will be able to continue doing what they’re doing. 

When McKelvey asked Morita if the PUC planned to order the companies to cease and desist, she told him that he knew what the agency’s resources were like right now — limited.

That’s bad news for EcoCab and Charley’s Taxi, who have said UberX and Lyft are dodging expensive regulations that cab drivers have to comply with, creating an unfair market competition.

UberX is one of three services Uber offers currently in Hawaii. It’s fancier black car service, called UberBLACK, and partnership with traditional cabs, UberTAXI, are both in compliance with state law.

Uber reps would not tell lawmakers how many drivers they had providing UberX services, which are less costly than their other services and more on par with Lyft.

Caitlin O’Neill, Uber’s public policy associate, said there were “hundreds” of UberX drivers in Honolulu.

“We do try to protect those numbers due to the competitive nature of the market,” Uber’s associate general manager for Hawaii, Brian Hughes, said.