Raising Cane
By Rob Perez
Sunday, August 26, 2001
When two frequent Japanese visitors took a cab from their Waikiki hotel to the airport, they were charged $38 -- roughly 50 percent more than they should have paid. Some cabbies admit to fare hikes
Once the driver dropped them off, Bruce Matthews, who accompanied the two women on the 1999 ride, told the pair they had been overcharged.
But the tourists weren't upset. They normally paid a lot more for that same Waikiki-to-airport trip, they told Matthews, a cab driver the women had befriended.
Excessive cab fares are not uncommon even today.
The reason?
Some drivers apparently try to recoup the amount in kickbacks they pay to hotel employees to get more business.
In fact, tourists end up paying for a big chunk of the under-the-table payments that pervade many parts of the cab industry, according to interviews with nearly a dozen current and former drivers.
"One way or another, the tourists pay for it," said Patrick Sackville, who has driven cabs on and off for 40 years but has refused, for the most part, to engage in the payola practice.
The drivers and former drivers spoke to the Star-Bulletin in response to last Sunday's Raising Cane column, which described how some cab operators paid kickbacks to employees at prominent hotel chains in Waikiki.
For getting an airport run, a cabbie typically pays about $8. For a short "local run," the payment is usually $1.
The Star-Bulletin witnessed about half a dozen of the clandestine transactions.
Most of the drivers and former drivers said such payments are commonplace and have been for years, not just at the hotels.
Some cab operators secretly pay security guards at Waikiki rental condominiums to get passenger calls.
It works the other way, too. Prostitutes pay taxi drivers who bring them customers. Drivers also say some bars, strip clubs and golf courses provide payola, though several contacted by the Star-Bulletin denied doing so.
Some strip clubs pay $10 to $15 per Japanese tourist delivered by a cabbie, the drivers said.
Probably the most common type of off-the-books payments occur within the cab companies themselves. Drivers frequently pay dispatchers to get the most lucrative customer runs, and the dispatchers can make hundreds of dollars a week in unreported income, industry people say.
"It goes on everywhere," Star Taxi owner Bob Alfred said about some of the payment schemes. Alfred said he didn't engage in the illicit practice.
If the practice has been as commonplace as many drivers and former drivers say, where have the regulators been?
Certainly not cracking down on the problem.
Several of the drivers said they have complained to the city, which regulates the industry, over the years, even offering to help with sting operations. But regulators showed little interest, sometimes blaming a lack of funds or difficulty in proving the payments were illegal, according to the drivers.
Some say the 1993 city law prohibiting kickbacks in the cab industry is too vague to be effective.
"It's just one of those feel-good laws," said John Parker, who has driven a cab for 21 years here. "It's too gray and fuzzy."
The city did not respond to a request for comment.
Even Hawaii's tourism industry has done little to tackle the payola problem.
Yet it is unequivocally condemned by tourism and hotel executives, especially for its harmful effects on the industry.
Said Gail Chew of the Hawaii Visitors and Convention Bureau: "The HVCB frowns upon any practice that takes unfair advantage of visitors to Hawaii."
Visitors who use cabs potentially can pay more in fares, bar charges and other expenses because of the kickbacks.
An HVCB survey from 1998 showed that 24 percent of Japanese visitors to Oahu and 15 percent of U.S. ones used a cab during their stay.
More recently, a Japan Report survey of 500 Japanese tourists leaving Honolulu Airport showed even greater taxi usage.
About 41 percent said they used a cab while in Hawaii, according to the November 2000 poll.
Although some industry officials believe the kickback problem is confined to smaller- and medium-sized hotels without exclusive contracts with cab companies, drivers say that isn't the case at all.
Sackville said when he worked for Americabs from 1997 until last year, drivers at the then-Hawaiian Regent Hotel, which had a contract with the company, were expected to pay the bellman $2 per pickup or at least 10 percent of the fare for long trips.
If you didn't pay, you got only short trips, and "you couldn't make enough to survive on," Sackville said.
Americabs is part of The Cab, one of the state's largest taxi operators. A company representative didn't respond to a request for comment.
Some of the companies that shun the payola say they are at an unfair disadvantage to those that don't.
Alfred said his Star Taxi never gets business from hotel bellhops, even though it charges a flat fare of $18 for trips between Waikiki and the airport.
That's well below what many competitors charge.
"Yet I'd never in a thousand years get a call from a hotel," Alfred said.
Although cab meters can be set at no more than $2.40 per mile under city regulations, drivers can inflate fares by taking longer routes or adding extra fees.
Some drivers said they commonly hear passengers complain about paying substantially more for a cab ride from Waikiki to the airport than for a ride in the opposite direction.
Those tourists leave Hawaii feeling victimized, the drivers said.
"These people aren't going to come back if they're ripped off or gouged," said Matthews, the former cabbie who knows Japanese residents who have vowed to vacation elsewhere for that reason.
Star-Bulletin columnist Rob Perez writes on issues
and events affecting Hawaii. Fax 529-4750, or write to
Honolulu Star-Bulletin, 500 Ala Moana Blvd., No. 7-210,
Honolulu 96813. He can also be reached
by e-mail at: rperez@starbulletin.com.
