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OFFICE OF `THE CO[I1~(`TY CLE[OUM'r CI_~:,~;<
NTY OF HAWAII
county of Hauaii
Haunii County Building
25 Aupuni Strtrt
Hilo, Hattnii 95720
Mazch 6, 1997
To: Dominic Yagong, Chair
Committee on Public Works and Parks
From: Rick Sumada
Program/Fiscal Review Auditor
RE: TAXICAB PROFILE
Attached for your consideration is this office's analysis of the taxicab industry in Hawaii County
per your Committee's request. Feel free to call me at ext. 8564 if you have any questions
regarding this report.
APPROVED:
~~ll~llrr ,~L~l L(
Connie Kiriu
Legislative Auditor
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mot. To: PwPc. _
kteet, nark IMAR o F 1997
TAXICAB PROFILE
COUNTY OF HAWAII
OFFICE OF THE LEGISLATIVE AUDITOR
February 1997
TABLE OF CONTENTS
BACKGROUND ...........................................................1
METHODOLOGY ..........................................................1
LEGISLATIVE HISTORY ...................................................2
OVERVIEW OF THE INDUSTRY IN HAWAII COUNTY 3
USE OF RESOURCES 7
COMPLAINTS AND ENFORCEMENT 8
ADMINISTRATION OF TAXICABS IN OTHER COUNTIES 11
ANALYSIS AND CONCLUSIONS 13
DEFINITIONS AND ACKNOWLEDGMENTS 15
ADDENDUM TO TAXICAB PROFILE 16
APPENDIX:
Graph-Registered Taxicabs ......................................................................................Exhibit A
Graph-Visitor Arrivals .............................................................................................Exhibit B
Graph-Resident Population ......................................................................................Exhibit C
AGENCY RESPONSE:
Mass Transit Agency not provided
Department of Finance not provided
Office of the Corporation Counsel attached
TAXICAB PROFILE
County of Hawaii
Office of the Legislative Auditor
February 1997
BACKGROUND
On January 7, 1997, the Committee on Public Works and Parks of the Hawaii County Council
("Council") requested that the Office of the Legislative Auditor conduct an analysis of the
taxicab industry in Hawaii County ("County") in response to public testimony of abuses in the
industry.
This analysis focuses on specific taxicab concerns raised by Council members and attempts to:
1) Provide a history of taxicab legislation;
2) Identify requirements to operate a taxicab;
3) Document how the industry's requirements aze administered by the County;
4) Evaluate resources utilized by the Transportation Commission ("Commission");
5) Evaluate the County's complaint and enforcement process and history.
This analysis does not address issues relating to the operation of Sampan buses, the County's
shazed ride program or any vehicles or operations under the authority of the Public Utilities
Commission or any other State authority.
METHODOLOGY
This report was prepared from information and data obtained from the following sources:
1. Various statutes, codes, ordinances, Hales and regulations of the State of Hawaii, County of
Hawaii, City & County of Honolulu, County of Maui and County of Kauai.
2. Minutes of the Commission, the Council's Committee on Public Works and Parks and past
Council's Committee on Human Services and Public Works and Human Services and
Recreation Committee.
3. Interviews with vazious personnel employed by and correspondence filed at the County's
Mass Transit Agency, Office of the Corporation Counsel and Department of Finance.
4. Interviews with various personnel from the City & County of Honolulu, County of Maui and
County of Kauai.
1
LEGISLATIVE HISTORY
All counties acquire the authority to regulate the taxicab industry from Chapter 46-16.5, Hawaii
Revised Statutes (HRS), "Public Passenger Vehicle Regulation". This statute empowers each
County to regulate entry into the business of providing public passenger vehicle service, the rates
charged for the provision of public passenger vehicle service and the establishment of stands to
be employed by one or a limited number of providers of public passenger vehicle service.
Chapter 271-5(3), HRS, "Motor Carrier" and Chapter 269-1, HRS, "Public Utilities
Commission," specifically exempts taxicabs from provisions under those Chapters.
Chapter 18, Hawaii County Code (HCC), "Public Transportation", authorizes the administration
of the taxicab industry in the County. Section 18-5, HCC, conveys the powers and duties of
general supervision over taxicabs to the County Transportation Commission ("Commission").
The Commission is a nine member panel, one from each council district, appointed by the
Mayor and approved by the County Council. The Commission may serve as an advisory body to
the Mass Transit Agency and upon request of the Mayor or Council, advise on other
transportation-related matters (Section 18-3, HCC). The Commission has adopted "Rules and
Regulations of the County Transportation Commission" providing further guidance with respect
to taxicab administration. Per Rule & Regulation 4(a), meetings of the Commission are held on
the first Thursday of March, June, September and December. Section 18-4, HCC, designates the
transit operations coordinator (the Mass Transit Agency) as the chief administrator for the
Commission.
In March 1990, Ordinance No. 90-019 was adopted amending Chapter 18 of the Hawaii County
Code. The ordinance imposed an annual taxicab license fee of $120 per license. The intent of
the license fee was to provide funding for enforcement of the taxicab ordinance.
In September 1990, Ordinance No. 90-119 was adopted further amending Chapter 18 of the
Hawaii County Code. The ordinance eliminated the then existing limitation of one taxicab per
1,200 resident population on the island and replaced it with the current system requiring
demonstration of public convenience and necessity. This change was made pursuant to an
opinion from the Office of the Corporation Counsel dated December 5, 1989 which advised that
the County would be in violation of federal antitrust provisions (Sherman Act, 15 U.S.C. 1-7) if
limitations to entry into the taxicab industry were not based on public health, safety and welfare.
A maximum of 96 taxicabs were allowed under the 1:1,200 formula. Drawings for certificates
of public convenience and necessity would be held by the County if additional taxicabs were
calculated using this formula. A secondary market existed where current certificate holders
would sell their certificates to prospective taxicab applicants.
2
OVERVIEW OF THE INDUSTRY IN HAWAII COUNTY
Certificate of Public Convenience and Necessity
Obtaining permission from the County to operate a taxicab is a three step process. First, a
certificate of public convenience and necessity ("certificate") must be obtained. The certificate
filing fee is $ ] 0, is valid for an indefinite term and is only good far one taxicab per certificate.
The applicant provides information on an application to the Commission which then decides at a
public hearing whether the certificate will be granted. Per Section 18-32, HCC, information to
be provided on the application includes the name and address of the applicant, prior taxicab
experience, criminal abstracts, number of taxicabs desired, passenger capacity of each vehicle,
written assurance that each vehicle will be kept in clean and good operating and physical
condition, insurance proposed to be carried, details of service to be provided and evidence
supporting public convenience and necessity being served. The Commission is to base its
decision to grant certificates on the following criteria per Section 18-33, HCC:
a. The current status of the public transportation system in the County, including but not
limited to that system's current and future ability to provide for the timely and effective
movement of people;
b. The demonstrated need, as shown by the applicant for a certificate, for additional taxicab
service in the County that is not, or cannot be, accomplished by existing companies;
c. The financial responsibility of the applicant;
d. In consideration of the current status of the County's public transportation system, the ratio
of population in the area to be served to the number of taxicabs currently in operation;
e. Any prior experience by the applicant in the taxicab industry, and the moral character of the
applicant;
f. The interests of the applicant in establishing a local business to legitimately serve the citizens
of the County as well as visitors to the island; and
g. Any other factors which the Commission may deem advisable or necessazy.
As described above, demonstration of public convenience and necessity by the applicant is to be
in written form on the application. The applicant, however, is not given any guidance on what
constitutes a reasonable or valid demonstration.
Historically, very little evidence has been provided or presented to the Commission
demonstrating public convenience and necessity. What has been presented has not been
structured (e.g. population, hotel room or taxicab response statistics). Most of the responses, if
not left blank, have been completed as follows:
l . "Business is good, I want to expand it."
2. "Lots of tourists coming to the island."
3. "Business is increasing and I would like to have an extra car for maintenance reasons."
4. "There is limited service to hospitals, dialysis center and airport mostly during the
evening hours and I want to increase that service with two cabs."
3
In deciding whether to grant certificates, the Commission must consider the current status of the
County's public transportation system by the ratio of population in the area to be served to the
number of taxicabs currently in operation. This criteria instructs the Commission to consider
this ratio but does not provide guidance on when the ratio is indicative of an excessive amount of
taxicabs. The criteria forces the Commission to make a determination of how many taxicabs to
allow in the marketplace without any objective basis for determining wl~n that marketplace is
full. The Commission has approved most applications since the adoption of Ordinance No.
90-119 and does not appear to have based its decisions on criteria established in Section 18-33,
HCC.
For the Council's information, we prepared the graphs in the Appendix from statistics in the
1995 Data Book, County of Hawaii, to illustrate how registered taxicab growth (Exhibit A)
correlates with resident population growth (Exhibit C) rather than visitor arrivals (Exhibit B).
Consequently, growth in taxicab service to residents appeazs to be supported by statistics through
] 995. If an applicant intends to serve the visitor industry, data through 1995 does not appear to
justify the service. Recent direct flights from Japan into West Hawaii, however, changes that
analysis and is a factor for consideration in this area.
Temporary Certificates and Transfers
Certificates are transferable with approval from the Commission. Rule and Regulation 4(c)
allows temporary certificates to be issued by the Director of Finance (responsibility transferred
to the Mass Transit Agency in July 1995) once a completed application for transfer is received
and licensing requirements have been met. A temporary certificate allows an applicant to
operate a taxicab until the Commission can meet to determine whether to approve the application
to transfer an existing certificate from a current taxicab operator to the applicant. Transfer
applications differ from normal certificate applications in that if the service is to be provided
under the same terms and conditions as provided in the original certificate, the service will be
assumed to be justified by public convenience and necessity. Temporary certificates expire on
the date of the next Commission meeting when the application is heard by the Commission.
4
The Department of Finance and Mass Transit Agency report total taxicab certificates as follows:
FY # of certificates
91 96
92 75
93 99
94 113
95 129
96 137
97 (at 1 /97) 129
Changes from year to year are due to certificates revoked offsetting new certificates granted.
Commission meeting minutes report the following number of certificate applications were
approved and denied or revoked:
New Transfers
FY A r v Denied A r v Rev k
91 1 14
92 14 9
93 5 10
94 35 5 12
95 25 7
96 12 ]3
97 (through 12/5/96) 7 4 2 3
Total 99 9 67 3
5
Taxicab Driver's Permit
Once a certificate is obtained, the applicant then obtains a taxicab driver's permit ("permit").
Permits are issued by the Chief of Police, cost is $10 for an initial issuance or $5 for renewal and
expires one year from issuance. A written examination is conducted to determine that the
applicant can satisfy the following per Section 18-39, HCC:
a. Has a reasonable knowledge of the traffic laws;
b. Has a reasonable knowledge of the locations of streets, roads, highways, buildings and
places; and
c. Is able to speak and understand English language well enough to converse with English-
speaking people.
d. Is 18 years or older at the time of application;
e. Has a valid State of Hawaii driver's license; and
f. Complies with standards of the Chief of Police relating to moral character and physical
fitness.
Taxicab License
Lastly, a taxicab license ("license") is required. The license is also issued by the Mass Transit
Agency (responsibility transferred from the Director of Finance in July 1995), cost is $120 per
year, expires June 30 of each year; is not transferable and only allows the operation of one
taxicab per license. The Chief of Police performs the inspection of vehicles and certifies
compliance to the Mass Transit Agency of the following per Section 18-37.1, HCC:
1. Posting of taxicab driver's permit;
2. Posting of fare schedule;
3. Physical condition of taxicab;
4. Taxicab roof sign;
5. Taxicab control number;
6. Taximeter inspection;
7. Trade name and markings;
8. Financial responsibility.
6
USE OF RESOURCES
Operating expenses of the Commission are budgeted and recorded in the Mass Transit Agency's
accounts. The Commission incurred the following expenses over the last two fiscal years:
1995-96 1996-97 (through 12/96)
Meeting notices $3,237 $1,744
Mileage reimbursements 1,362 752
Investigations 1
770 3
500
Total 6 369 5 996
In addition, various County personnel provide administrative and clerical support and counsel to
the Commission. Each of the following allocate approximately 5% of their time supporting
Commission activities:
1. Thomas Brown, Mass Transit Agency
2. Tiffany Kai-Calicdan, Mass Transit Agency
3. Frederick Giannini, Office of the Corporation Counsel
7
COMPLAINTS AND ENFORCEMENT
Enforcement of County regulations has been initiated primazily by other taxicab drivers who file
complaints against other taxicabs when violations are observed or suspected. Complaints are
received by the Mass Transit Agency and the Office of the Mayor either in written or verbal
form. Serious complaints are put in writing and referred to the Commission for resolution.
Minor complaints aze handled by the Mass Transit Agency.
The following enforcement actions have been taken by the Commission since fiscal yeaz 1990-
91 (FY91):
a. Findings of Fact, Conclusions of Law, Decision and Order:
1. September 1991, Complaint against Darwin Brooks, d.b.a. Aloha Taxi Dispatching
Service, for operating four vans as taxicabs without valid taxicab licenses, without
properly registering and inspecting taximeters and without proper license stickers.
Commission ordered suspension of four taxicab licenses for thirty days.
2. March 1992, Complaint against Island Taxi & Tours for operating a taxicab and charging
a flat rate, cazrying more than eight passengers and not operating a meter. Commission
ordered suspension of taxicab license for thirty days.
3. December 1992, Complaint against Kona Airport Taxi for operating three taxicabs
without valid taxicab licenses. Commission ordered suspension of three taxicab licenses
for thirty days.
4. December 1995, Complaint against Aloha Transportation, Inc. operated by Alex Garcia
for operating taxicabs and chazging flat rates, operating without a valid taxicab permit
and providing student discounts in excess of 20% of the meter fare. Commission ordered
$500 fine per violation totaling $1,500.
b. One investigation has been performed by an outside investigator. Wood & Tait, a private
investigating company, was hired in September 1995 to investigate complaints against Aloha
Transportation, Inc. (see Finding of Fact, Conclusions of Law, Decision and Order #4
above).
8
c. The following number of certificates have been revoked primarily for reason #2 noted
below:
Certificates
Year Revoked
FY91 0
FY92 0
FY93 17
FY94 15
FY95 3
FY96 6
FY97 (through 12/5/96) 11
Total 52
Note: Certificates may be revoked only for any of the following causes per Section 18-8,
HCC:
1. The failure of the carrier to comply with the terms and conditions of its certificate.
2. The discontinuance by the carrier of the business of transporting passengers as a
common carrier of passengers operating upon and using the public highways for a
period of thirty consecutive days or more.
3. The conviction of any driver of a vehicle operated by a certificated carrier of the
charge of driving while intoxicated or under the influence of intoxicating liquor.
4. The failure of the carrier to comply with this division and any lawful order of the
Commission.
5. Failing to obtain a taxicab license for the current year within thirty days after the
certificate is granted.
d. A complaint against Sid's Taxi was heard at the Commission's September 5, 1996 meeting
for not securing a taxicab license within thirty days of being granted a taxicab certificate.
The Commission voted to revoke the taxicab certificate in question.
e. Letter to Mauka Taxi was sent August 21, 1995 regarding use of an unlicensed vehicle as a
taxicab. Applicant subsequently paid required license fees as instructed.
In June 1993, the Commission approved the hiring of an investigator to address complaints made
against licensees. The Commission was presented with various methods of hiring an outside
investigator by the Office of the Corporation Counsel over the next two years. The introduction
of new procurement procedures appears to have created problems with the process. An
investigator was hired in September 1995 specifically to investigate complaints against Aloha
Transportation, Inc., which was resolved as indicated above. No other investigations have been
made.
9
To date, the following complaints, documented in written and oral testimony to the Commission,
have not been addressed:
I . Flat rates charged instead of use of meter
2. Unhealthy taxicab drivers (physicals should be required)
3. Violence and threats among taxicab drivers
4. Excessive number of taxicabs
5. Refusal of service due to short fares
6. Chazging each person
7. Passengers being allowed to drive taxicab
8. Kickbacks to hotel personnel
9. Hotels soliciting taxis with lowest fares
10. Taxicab operators advertising lowest fares
11. Unlicensed vehicles used as taxicabs
12. Shortest routes not being taken
13. Fares taken out of sequence
14. Unfamiliarity with destinations by new taxicab drivers
15. Investigation of complaints not performed
16. Request to raise meter rates
Similarly, complaints against the following taxicabs have not been addressed:
1. Island Cruise Taxi
2. Laura's Taxi
3. Air Taxi & Tours
4. Adolfo's Taxi
The Department of Finance and Mass Transit Agency report the following amounts of license
fees collected with corresponding amounts budgeted and expended for investigations:
FY 1Co lected Budeet Ex n
9] $11,080 $0 $0
92 11,718 10,000 0
93 8,660 10,000 0
94 ]3,175 10,000 0
95 17,580 10,000 0
96 16,014 10,000 1,770 (Wood & Tait-Aloha Trans, Inc.)
97 (through 1/97) 15 014 ] 0 000 3
500 (Wood & Tait-Aloha Trans, Inc.)
Total $9~ $60 000 $5
10
ADMINISTRATION OF TAXICABS IN OTHER COUNTIES
A comparison of how the taxicab industry is administered on the neighbor islands was
performed by the Office of the Corporation Counsel and reported to the County Council in a
memo dated September 9, 1996. Extracts of information provided in that memo as well as other
information are presented as follows:
Citv & County of Honolulu (Oahul
Oahu exercises its authority to regulate taxicabs under Chapter 12, Article 1 of the Revised
Ordinances of Honolulu. This ordinance is supplemented by Rules and Regulations of the
Director of Finance, Rule 26 that provides for additional guidance regarding the regulation of
taxicabs.
Oahu does not have a boazd or commission that oversees administration of taxicab regulations.
Taxicab provisions are administered by the Department of Finance which requires that a taxicab
certificate and license be obtained to operate a taxi. There is no limit on the number of taxicabs
on Oahu. A certificate and license to operate is granted as long as certain criteria (e.g. valid
State of Hawaii drivers license; sufficient understanding of traffic laws, streets, English
language; compliance with standards of moral character and physical fitness and financial
responsibility) are met. There are currently approximately 2,000 taxicabs on Oahu.
Oahu has formal complaint and investigation procedures documented in its Rules and
Regulations that requires all complaints against a licensee to be in writing to the Director of
Finance. The licensee is notified and required to respond in writing to the allegations within five
days of notification. If an investigation is deemed necessary, the complaint is referred to the
Motor Vehicle Control Section of the Division of Motor Vehicles and Licensing who has
inspectors on staff to perform the investigation. The Division utilizes one inspector on a full-
timebasis to investigate complaints. Based on the findings of the investigation, the Director of
Finance takes appropriate action.
County of Maui (Maud
Maui exercises its authority to regulate taxicabs under Chapter 5.16 of the Code of the County of
Maui.
Maui does not have a board or commission that oversees administration of taxicab regulations.
A chauffeur's (driver's) license and taxicab permit are required to operate a taxicab on Maui.
Taxicab permits are issued by the Chief of Police and require that certain criteria are met (e.g.
reasonable knowledge of traffic laws, streets and English language). Taxicab licenses are limited
to one taxicab for each sixty hotel rooms or five-hundred resident population, whichever is
greater. The Director of Finance computes the limit on an annual basis. There are currently 213
taxicab licenses on Maui based on 12,793 hotel rooms. Maui's Corporation Counsel does not
know whether their limit would be considered a violation of antitrust provisions. No one has
challenged the limit, however, and they appeaz willingly to maintain the system until they are
forced to change it.
11
No formal provisions for processing complaints against licensees are in place. Complaints are
investigated by the Police Department.
It is interesting to note that Maui just recently completed a study of its taxicab industry and has
developed a set of recommendations for amending its existing taxicab ordinance. One of the
recommendations made to the Council by a committee appointed by the Mayor was to establish
a "taxicab adjudication board" whose responsibility it would be to hear all complaints, review
evidence and recommend actions to be taken. The board would also be empowered to suspend
or revoke licenses. Existing fees would be increased and a new annual "taxi business license"
would be required to fund the operations of the board. Other recommendations made by the
committee would be to reduce the number of taxicabs on the island by changing the formula
used to compute the taxicab limit. The proposed change would reduce the number of taxicabs
on Maui from 213 to 135. Initial meter actuation was recommended to be changed from $1.75
to "no more than $2.00" to allow taxicabs to compete on rates. The recommendations are
pending in the Maui County Council's Committee of the Whole.
County of Kauai (Kauai)
Kauai exercises its authority to regulate taxicabs under Chapter 23, Article 1 of the Kauai
County Code. This ordinance is supplemented by "Rules and Regulations of the Director of
Finance Relating to Taxicabs".
Kauai does not have a board or commission that oversees administration of taxicab regulations.
Taxicab provisions are administered by the Department of Finance who requires that a taxicab
permit be obtained to operate a taxicab. There is no limit on the number of taxicabs on Kauai.
A permit is granted as long as certain criteria (e.g. valid State of Hawaii driver's license, reached
age of majority with two years of driving experience, sufficient knowledge of traffic laws,
streets, English language and compliance with standards of moral character) are met. There are
approximately 129 taxicab licenses on Kauai.
No formal provisions for processing complaints against licensees are in place. Complaints are
investigated by the Department of Finance, Driver Licensing Division.
12
ANALYSIS AND CONCLUSIONS
1. Regulation vs. Non-regulation
The Council should decide if it is in the best interest of the County to regulate an industry
and limit the number of entrants into the system or to allow an unlimited number of entrants
to compete against one another. Both methods of determining the number of taxicabs in a
County are being used on the neighbor islands-no limit on Oahu and Kauai and a computed
limit on Maui. Allowing unlimited access to the industry would relieve the Commission of
assessing public convenience and necessity which is a subjective process at present. If
unlimited access is to be allowed, however, it is imperative that an effective system of
enforcement be in place to resolve conflict. Maintaining the present system of assessing
public convenience and necessity was meant to allow the Commission to provide for
fluctuating taxicab needs within the County. If this system is continued, it is imperative that
the Commission regulate certificates based on criteria established for determining public
convenience and necessity. This creates a predicament for the County because to accomplish
this objectively, the Commission needs a standard for determining how many taxicabs are
too many. Regazdless of how this standard is applied, it must also satisfy antitrust challenge.
2. Due Process in Certificate Issuance
The Commission has not fully complied with Chapter 91-12, HRS, and Rule & Regulation
4(f)(6) when decisions have been rendered. Per Chapter 91-12, HRS, "Administrative
Procedure", every decision and order adverse to a party shall be in writing or stated in the
record and shall be accompanied by separate finding of fact and conclusion of law. The
agency shall notify the parties to the proceeding by delivering the decision and order and
accompanying findings and conclusions within a reasonable time. Per Rule and Regulation
4(f)(6), if the Commission decides against an application for a certificate, "it shall issue an
appropriate statement detailing the reasons for denial of the application. The Commission
shall within a reasonable time send a certified copy thereof to the applicant".
At the Commission's September 5, 1996 meeting, three transfer applications were revoked.
Subsequent to the meeting, the Office of the Corporation Counsel advised the Mass Transit
Agency to extend the applicants' temporazy certificates till the next Commission meeting in
December as the basis for revoking the certificates were not stated in accordance with
Section 18-8, HCC. At the next Commission meeting held December 5, 1996, two of the
three certificates along with a new transfer application were revoked. No specific reasons
for revoking the certificates were provided by the Commission.
At the Commission's August 26, 1993 and December 6, 1996 meetings, a total of nine new
certificate applications were denied. At the Commission's June 1, 1995 and September 5,
1996 meetings, thirteen certificates were revoked. No specific reasons for the denials and
revocations were provided by the Commission.
It should be noted that Rule and Regulation 4(f)(6) does not recognize that issuing a
13
certificate could adversely affect a party other than the applicant. If procedures pursuant to
Chapter 91-12, HRS, were in place, it clearly establishes a process whereby other parties'
rights would be recognized.
3. Complaints and Enforcement
The County does not appear to have met its obligation in investigating complaints and
enforcing taxicab regulations. Based on an examination of Commission meeting minutes,
the majority of complaints received by the Commission between September 1990 and
December 1992 were addressed and resolved as evidenced by sanctions levied against Aloha
Taxi Dispatching Service, Island Taxi & Tours and Kona Airport Taxi. Since that time,
however, enforcement has been sporadic. Several complaints have not been addressed and
only one investigation has been performed. One of the reasons for the lack of enforcement is
due to the absence of any formal guidelines in regulation, rule or policy on how complaints
are to be handled and by whom. This absence has created confusion among the agencies
involved and prevented the Mass Transit Agency and the Office of the Corporation Counsel
from hiring an investigator for over two years. Inactive certificates have been monitored for
compliance with Section 18-8, HCC.
The Council should specify in the Hawaii County Code what agency is responsible for
reviewing, investigating and disposing of complaints. If the law is clear, the complaint and
enforcement process can be handled administratively. If there is an appeal of an action, the
Commission could serve as the appellate body.
4. Use of Resources
The role served by the Commission appears to be a worthwhile one because it provides a
public forum where participants in the industry can voice their concerns to a panel
specializing in transportation issues. The structure in which the Commission operates also
appears sound with administrative support from the Mass Transit Agency and legal advice
available from the Office of the Corporation Counsel. This structure does not appear to
require an overwhelming amount of County resources as indicated by the amounts expended
and time allocated by County personnel Improvements could be made, however, in the
execution of Commission affairs as described earlier (e.g. application of criteria for issuing
certificates, adherence to formality when rendering decisions and clarity in responsibility of
processing and investigating complaints).
14
DEFINITIONS
1. Taxicab-a vehicle designed to carry not more than eight passengers operated by a taxicab
driver, which is used in the movement of passengers for hire on the public highways and
which is directed to a destination by the passenger for hire or on the passenger's behalf and
which operates on call or demand. (Section 18-31, HCC)
2. Findings of Fact, Conclusions of Law, Decision and Order-Document that has been prepared
by the Office of the Corporation Counsel on behalf of the Commission to summarize
allegations, findings and penalties against taxicabs in violation of Chapter 18 of the Hawaii
County Code.
ACKNOWLEDGMENTS
We would like to thank Thomas Brown and Tiffany Kai-Calicdan of the Mass Transit Agency
and Frederick Giannini of the Office of the Corporation Counsel for their cooperation in
assisting this office in completing this report.
15
ADDENDUM TO
TAXICAB PROFILE
16
ADDENDUM TO TAXICAB PROFILE
Subsequent to issuing the report entitled, "Taxicab Profile", dated February 1997, the Office of
the Legislative Auditor reviewed cassette tapes of County Transportation Commission
("Commission") meetings held September 5, 1996 and December 5, 1996. Based on a review of
these tapes, additional observations relating to how the taxicab industry's requirements aze
administered by the County of Hawaii ("County") were noted and are presented in this
addendum.
1. Minutes of the Commission meeting held September 5, 1996 do not accurately reflect actual
proceedings as evidenced on cassette tape. Per Chapter 92-9, HRS, "Public Agency
Meetings and Records", minutes shall give a true reflection of the matters discussed at the
meeting and the views of the participants. The minutes shall include: (1) the date, time and
place of the meeting, (2) the members of the board recorded as either present or absent; (3)
the substance of all matters proposed, discussed, or decided; and a record, by individual
member, of any votes taken; and (4) any other information that any member of the board
requests be included or reflected in the minutes. The following examples of inconsistencies
were noted:
a. Motions not recorded in minutes-3 occurrences.
b. Voting record by individual Commissioner not recorded in minutes-14 occurrences.
c. Basis for revocation of certificate of public convenience and necessity ("certificate")
stated in meeting not recorded in minutes-10 occurrences.
d. Action on application for transfer of certificate inaccurately recorded in minutes as
"revoked" were actually "denied"-3 occurrences.
2. Other inconsistencies noted in meeting and minutes of September 5, 1996:
a. Corporation Counsel indicated that a letter would be prepazed by their office and sent to
hotels indicating that the practice of accepting "kickbacks" from taxicabs is prohibited as
provided under Section 18-373(c), Hawaii County Code (HCC). This letter was never
sent
b. Cassette tape of the last segment of the meeting was not available to verify the minutes of
that portion of the meeting.
c. Vote not taken on motion-3 occurrences.
d. Minutes of the meeting were signed by the Chairman of the Commission and the Transit
Administrator on October 22, 1996, 47 days after the meeting. Public access to minutes
was not made in accordance with Chapter 92-9, Hawaii Revised Statutes (HRS), "Public
Agency Meetings and Records", which require that minutes shall be public records and
shall be available within thirty days after the meeting.
17
3. Minutes of the Commission meeting held December 5, 1996 do not accurately reflect actual
proceedings as evidenced on cassette tape. The following examples of inconsistencies were
noted:
a. Motions not recorded in minutes-2 occurrences.
b. Voting record by individual Commissioner not recorded in minutes-15 occurrences.
c. Basis for denial of certificate stated in meeting not recorded in minutes-3 occurrences.
4. Other inconsistencies noted in meeting and minutes of December 5, 1996:
a. Vote not taken on motion-3 occurrences.
b. Minutes of the meeting were signed by the Chairman of the Commission and the Transit
Administrator on January 21, 1997 and January 20, ] 997, 47 and 46 days after the
meeting, respectively. Public access to minutes was not made in a timely manner per
Chapter 92-9, HRS.
c. Two applicants whose applications for certificates were approved by the Commission
were required to provide proof of insurance the day after the meeting to the Mass Transit
Agency. Per Section 18-33(b), HCC, the applicant has thirty days to comply with the
requirements of the chapter.
18
ANALYSIS AND CONCLUSIONS
1. MeetingrProcedures
Recordings of Commission meetings indicate departure from basic pazliamentazy procedures
at times. Though the departures appear inadvertent, parliamentary procedures should be
followed more closely to ensure order is maintained at all times and that the Commission's
intent and actions are cleaz. The following improvements should be made:
a. All Commission members should be trained in and be required to comply with basic
pazliamentazy procedures.
b. Only those recognized by the Chairman should be allowed to speak. All others should be
ruled out of order. Interruption of those who have the floor by others should not be
tolerated.
c. Motions should be clearly stated. In the course of denying, revoking or suspending
certificates, each motion should also include the basis for the motion in accordance with
Section 18-33, HCC (denials), or Section 18-8, HCC (revocations and suspensions).
d. All motions should be voted on by the Commission.
2. Minutes
The Commission's minutes are transcribed in summary form from cassette tapes made at the
meetings by the Mass Transit Agency. Minutes can be maintained in this format as long as
certain standards as outlined in Chapter 92-9, HRS, are met. These standazds do not appear
to have been met from review of the minutes and tapes of Commission meetings held
September 5, 1996 and December 5, 1996. The Commission should be required to prepare
its minutes in accordance with Chapter 92-9, HRS.
19
Exhibit A
HAWAII COUNTY
REGISTERED TAXICABS
130 -
120 _ _
110 -
100
90 -
1991 1992 1993 1994 1995
YEAR
Exhibit B
HAWAII COUNTY
VISITOR ARRIVALS
1200000 - -
1180000 -
1160000 -
1140000 -
1120000
1100000 - -
1080000 - -
1060000
1991 1992 1993 1994 1995
YEAR
Exhibit C
HAWAII COUNTY
RESIDENT POPULATION
140000 -
- -
135000 ~ - - -
130000 - - -
125000
i 120000 -
1990 1991 1992 1993 1994 1995
YEAR
SV fN
`y
Stephen K. Yamashiro Richard Wurdeman
Mayor Corporation Coav<I
R oi•w~~'
~IIUnfg II~ ~ttftxttit
OFFICE OF THE CORPORATION COUNSEL
101 Aupuni greet, Suite 325 Hilo, Hawaii 96720-4262 (808) 9618251 Faa (808) 969)7049
March 5, 1997
MEMO T0: Legislative Auditor
ATTN: Rick Sumada
FROM Frederick Giannini, Deputy Corporation Counsel
SUBJECT: Review of Taxicab Industry
This is in response to your referral to this office of the
review of the taxicab industry for our comment. I believe
that the study you have done points out several problems with
the present county legislation which attempts to regulate the
taxicab industry. The problems of which I am aware are those
which involve the role of the Transportation Commission.
On page 3 of your report, you note that the standards for
obtaining a certificate of convenience and necessity pursuant
to Hawaii County Code §18-33 are unclear. I agree. As you
point out, §18-33(b) requires that the applicant for a
certificate must show the "demonstrated need" for additional
taxi service in the county that cannot be supplied by the
present companies. It is difficult, however, for an
individual to put together such a showing. If he is only one
person, as many owners are, he is usually unlikely to have the
wherewithal to find the appropriate information. The code
section is also unclear as to how the information is to be
supplied that will let the Commission determine those factors
listed in §18-33(a) and (d). As you have noted on page 4,
§18-33(d) requires an examination of the ratio between the
population and the number of cabs, but provides no guidance as
to the appropriateness of the ratio.
Based upon experience with the Transportation Commission, I
believe that it would be in the best interest of the County of
Hawaii to do away with the present system of issuing
certificates of convenience and necessity by the commission
and replace it with the type of procedure used in the City and
Legislative Auditor
Attn: Rick Sumada
Page 2
March 5, 1997
.
County of Honolulu or the County of Kauai, in which the
decision to allow someone to operate a taxicab business is
strictly an administrative process. This would eliminate the
problem of the Commission attempting to apply the vague
standards of §18-33.
Furthermore, the enforcement duties should be handled
administratively by the Mass Transit Agency, in the same
manner as violations of the Zoning Code are handled pursuant
to §25-2-35 of the County Code. It is unrealistic to have
enforcement duties handled by a citizen panel which meets only
four times per year.
Please contact this office if there are any questions.
FG:mo
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