Op-ed: Hawaii Should Continue to Embrace Innovation

Tarik Sultan_Sultan Ventures_Innovation_Ridesharing_Uber_lyft

Hawaii Should Continue to Embrace Innovation

By Tarik Sultan, managing partner of Sultan Ventures and managing partner of XLR8UH, a nationally recognized startup program that invests in Hawaii’s top talent and research.


As a consumer, I look for five criteria when choosing a product or service: 1) Value – What is the price point?  Is it cheaper, more convenient? 2) Reliability – Will this service perform the way I want it to? 3) Security – Am I at risk from using this? 4) Transparency – Do I know all the facts before making this purchase? 5) Accountability – If anything goes wrong, is the appropriate party held accountable and the situation remedied?

Among the services that historically do not check all these boxes, taxicabs are top of mind. Think of the last time you needed to get somewhere: Could you hail a cab and confidently say you knew how long it would take for the cab to arrive, how much you were going to pay before getting in the cab, and whether you would be charged other add-on fees for baggage or anything else?

Ridesharing services, on the other hand, meet all five of my criteria. Not only do they provide consumers a much-needed, transparent platform to secure reliable rides, but they also do so at a fraction of the price of most cabs. The success of Uber and Lyft is a testament to Hawaii residents’ desire to embrace new ways of getting around. When it comes to affordable transportation options, more choice is a good thing. In general, ridesharing decreases costs and alleviates traffic congestion while simultaneously providing more income opportunities for local residents.

From a market perspective, technology such as ridesharing services should come along and disrupt antiquated business models, and it is up to the market – not government – to decide which business models should survive and thrive. Simply put – regulations should protect individuals, not a select group of companies.

However, a new bill making its way through the Honolulu City Council will discourage innovation and limit residents’ ability to choose between taxis and ride-share companies. Proponents say that Bill 35 will “level the playing field,” and limit ridesharing companies from setting surge pricing, but what it really does is protect incumbents at the expense of innovators.

Ridesharing companies exploded in popularity because they offered something the oligopoly of local taxi companies didn’t: a choice for consumers that offers a better experience at a transparent and often better price.

Surge pricing is free market supply and demand at work, and it is ultimately the consumer’s choice to accept surge pricing. Consumers who don’t want to pay surge pricing have other options. They can wait to see if the fare goes down. Or they are free to use the same smart phone they use to summon an Uber or Lyft to call a cab.

Historically, taxicab regulations were created to prevent shady price gouging in a time when pricing transparency was limited.  However, those same regulations are moot with current rideshare technology, where fares are made transparent and drivers are held accountable.  Bill 35 is setting restrictions to address an obsolete problem.

Instead of spending time fighting regulatory battles, taxi companies can embrace innovation. And it appears many of them already have. Local cab companies now offer mobile apps and web reservations, kamaaina rates, flat fees, and other features that make them a more appealing option. In business, competition breeds innovation. Innovation drives evolution, which elevates the entire industry and benefits consumers.

We need to keep moving forward, not looking back. If we continue to regulate innovative companies to death, it will make it impossible for them to do business here. Innovation has always been a part of Hawaii’s history, and we should continue to embrace emerging technologies that provide both better services and more job opportunities for Hawaii’s people.


Original article posted on Pacific Business News, JUN 1, 2018 @ 12:53 PM