- Associated Press - Friday, April 3, 2015

HONOLULU (AP) - The ride-sharing company Uber is threatening to shut down its Hawaii operations if a bill pending in the state Legislature is passed.

The bill aims to regulate transportation companies like Uber and Lyft where customers order rides by clicking a button on a smartphone app. Drivers logged into the same application get the customers’ requests and then use their own cars to give them rides.

The House Finance Committee heard testimony on SB 1280 Thursday, but the panel postponed making its decision until Tuesday.

If passed in its current form, the bill “would effectively end ride-sharing in the state of Hawaii,” said Brian Hughes, general manager of Uber’s Hawaii operation.

“It’s basically leaving Hawaii behind as the rest of the mainland actually moves forward with forward-thinking legislation,” Hughes said. “As we’ve seen in the past few days, there’s a lot that’s left to be desired in the current transportation infrastructure in the state.”

In its current form, the bill would change the insurance rules for drivers at a transportation network company like Uber, which would result in more expensive insurance policies.

That’s what’s behind the company’s threat to leave Hawaii, said David Jung, general manager of Eco Cab, an all-hybrid taxi company on Oahu.

“If they’re required to spend more money on insurance, which I don’t particularly want to do myself … the profit margin is too small and so they will leave,” Jung said. “I don’t think that’s a basis for us to bend backward and set up a separate exemption and customize or change the law for their profitability.”

Traditional bus and taxi companies want Uber and Lyft to abide by the same regulations as other companies in the industry.

Part of the issue is a difference between the types of insurance that traditional taxis carry, compared to Uber drivers.

At Uber, the company doesn’t own the cars that operate under its name. Instead, individual drivers start their own small businesses, using the Uber technology that connects drivers with customers. Uber drivers are covered by their own personal insurance policies while using their cars for errands or personal business, but once they pick up a passenger a heftier commercial policy takes effect.

In Hawaii, Uber operates on Oahu and Maui, and it has hundreds of drivers in the state, Hughes said. Uber drivers rallied outside the Legislature Thursday saying they hope the bill is either changed or killed.

“If we lose this, a lot of people will be out of work,” said Charles Kaawe, 54, an Uber driver from Ewa Beach. “It’s creating jobs … This is part of getting people out of poverty.”

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