State doles out big fines as stalemate with Uber continues

A day after KHON2 reported that Uber “unblocked” Honolulu International Airport on its app, its drivers are getting hit with big fines.

It’s a story Always Investigating revealed Thursday, and we’ve learned more about an escalating stalemate as rideshares get booked despite state rules that only permitted drivers should get the business.

The state Department of Transportation tells KHON2 it won’t be negotiating the issue with Uber, and as we dig deeper, it looks to be shaping up into a standoff between rideshares and regulators.

Taxis, shuttles and car services can only legally pick up fares at Hawaii airports if they have Public Utilities Commission (PUC) ground transportation licenses, airport permits, and meet customers only at the designated curbs.

For years, rideshare giant Uber had blocked its app from allowing bookings with its unpermitted drivers, allowing instead bookings with only about a dozen UberSelect drivers who carried all the state permits. But they opened it all up this week.

After Always Investigating caught on to the change, we asked why Uber says they’ve been trying for two years to set up an agreement with the state for pickups at the airports.

“Out of respect to the DOT during these outreach attempts, UberX drivers were not able to receive pick up requests from HNL (Honolulu International Airport),” said Uber spokesperson Maui Orozco. “However, other TNCs (transportation network companies) chose to continue pickups from the airport and have been doing so for nearly two years with little to no consequence. Unfortunately, our outreach attempts have been largely ignored by regulators.”

So now, it’s open for business.

“It’s one way to do it, it forces the issue,” said Alison Garcia, just arriving at the airport on a visit from San Jose. “If they’re not responding, it’s one way to take action and they’re doing that.”

KHON2 asked Garcia if she thought the state should try to make any moves to try to come to an accommodation with them. “Absolutely,” she said. “You have to negotiate.”

The state tells Always Investigating that they won’t be coming to the table anytime soon.

“HDOT has been considering the efforts of the City Council and the Legislature to explore regulation of rideshare companies such as Uber through the legislative process,” spokesperson Shelly Kunishige told KHON2. “The department believes this process is the best way for all parties to have their voices heard in this matter.

“Funding for the operation of public airports is derived through the payment of user fees such as those paid by the legitimate ground transportation providers that go through the permit process,” Kunishige added. “Bypassing the process means that those illegally engaged in commercial activity at the airports are not paying their fair share for use of public infrastructure.”

“There’s a line of taxis, there’s a legitimate business that’s already occupying the space,” said Hawaii resident Lahela Williams as she lined up for an airport ride, “so I would much rather patron a taxi or a cab that’s been around for a while.”

“That’s a pretty tough task, a lot of paperwork to go through and you do have to have experience in the industry and it does cost money,” said UberSelect commercial driver Brenten Yamane and owner of Kanoa Transportation, which holds PUC and airport permits. “You owe 1 percent of your gross to the PUC and you owe 7 percent of your gross to the airport, so the overhead is quite high.”

Just how much the airport gets from the permitted businesses is unclear, as it’s buried somewhere in its $116 million annual “other concessions” revenue line. A 2013 audit pegged the state’s share of just the taxi concession at only $104,000 a year.

The PUC says it took in just $1.6 million in motor carrier fees last fiscal year, and that’s not exclusively airports.

Uber’s Orozco tells KHON2 that “We want to open dialogue with the DOT on how we can reach an agreement for HNL. In more than 60 airports across the U.S., we have reached agreements.” Those agreements outline such terms as per-trip fees, geo-fences around the airports, insurance requirements and compliance with local rules and regulations.

Uber drivers got a mobile update after our story Thursday, reminding them that despite the app allowing bookings, Uber does not have an airport deal in place and drivers can refuse the fares. That didn’t stop many of the drivers from taking bookings Friday, with airport security telling us they’d already busted four unpermitted rideshares before midday. The tickets can be $500 plus other potential criminal penalties.

“I came to the Uber partner support center for a separate issue and when I got here, to my surprise, there were a lot of the noncommercial Uber drivers who had received citations at the airport and they were not happy,” Yamane said. “They were confused at first — apparently they didn’t see Uber’s little disclaimer.”

Rideshare companies have been pulling up to the closest baggage-claim curb, whereas taxis and scheduled shuttles have to wait across the media. Other permitted drivers have to queue offsite and can pick up only with confirmed bookings.

Since Uber lifted its airport block Monday –- and Lyft never had a block in place — unpermitted rideshare drivers can try to cruise the airport pickup areas and will show up as a closer car to baggage claim on the rideshare apps.

“They shouldn’t be coming if they’re not supposed to be,” said Letty Alvillar, visiting from Las Vegas. “I don’t think that’s fair, you know, I don’t think it’s right,” said Kealii Rodrigues, also visiting from Las Vegas.

Right or not, the rideshares are on the doorstep — or in this case, the curb.

“These type of things are really prevalent in the Bay Area,” said Garcia. “These things are just the way of the future and you’ve got to keep moving forward.”

We’ll follow up with the state on how many tickets they’ve issued both before and after the Uber app block, how much money they make from existing permitted concessions and drivers, and whether there’s a model the rideshare companies can buy into.

We also reached out to rideshare company Lyft for comment about their status with the state.

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