Raising Cane
By Rob Perez
Cabbie kickbacks
flourish at harborThe state allows so few taxis to pick up customers at Honolulu Harbor's only passenger terminal that a secret system has developed, resulting in unauthorized cabbies funneling kickbacks to dispatchers to get a piece of the growing cruise business.
The illegal transactions usually occur on state property when a cruise ship docks along the Fort Street terminal next to Aloha Tower Marketplace.
By paying kickbacks of generally $2 to $3 per ride, the unauthorized cabbies are allowed to enter a restricted area fronting the terminal to pick up passengers. That practice angers cab company officials who have unsuccessfully tried for years to get state permission to gain access to the terminal market.
State officials told the Star-Bulletin they were unaware of the kickback operation, but vowed to investigate.
The illicit system has taken off within the past few years, industry officials say, because the state's official system is grossly inadequate to handle the burgeoning cruise business, which last year brought roughly 250,000 people through Honolulu Harbor. The problems have worsened as companies have switched to larger ships holding more people.
While hundreds of passengers may seek taxis when a cruise ship docks, only 12 drivers have state permits to pick up customers in the restricted area.
The state has limited the number of drivers because of lack of terminal parking space for cabs and because of security concerns since the 9/11 terrorist attacks, according to Glenn Okimoto, deputy director of the Department of Transportation, which oversees the state's harbor operations.
When the 12 cabbies aren't enough to meet the demand, some cruise passengers walk to the nearby marketplace, where The Cab Co. has waiting drivers as part of its contract to serve that retail center.
But passengers not aware of the marketplace service often are directed in the other direction, where a dispatcher uses hand signals to summon unauthorized cabbies waiting along Nimitz Highway.
You can tell the drivers are not authorized to make terminal pickups because their vehicles lack the required DOT bumper sticker.
Yet a security guard, at the behest of the dispatcher, allows the drivers to enter the coned-off lane fronting the terminal. (Access to that lane is restricted when a ship is docked next to the terminal).
You've got to watch closely to spot the payola exchange. When the dispatcher approaches the taxi, the cabbie extends a closed hand holding the folded bills, which the dispatcher takes and quickly slips into an apron pouch.
I witnessed nearly a dozen such exchanges in more than an hour last Sunday as people were disembarking from the 2,240-passenger-capacity Norwegian Star.
Although the 12 authorized drivers chip in to hire the dispatchers, the group has nothing to do with the kickback operation, according to Roland Madera, one of the authorized drivers.
"We don't really approve of it, but there's nothing we can do about it," Madera said. "That's between the (unauthorized) drivers and the dispatcher."
One cabbie who participated in the kickback scheme three months ago said drivers were required to pay the dispatcher $2 for each Waikiki run and $3 for each airport run, which generates higher fares.
Because the drivers wouldn't know where the run was until they reached the terminal curbside, they kept $2 folded in one hand and $3 in another and extended the appropriate hand after the dispatcher mentioned the destination, according to the cabbie, who refused to be named for fear of retaliation.
The shortcomings of the existing system frustrate many in the taxi and cruise business because they say it falls far short of providing top service to a high-end market that Oahu should be nurturing.
They also say they are frustrated because they have been pushing the state to come up with a better system for years, yet have seen little change.
With the cruise industry one of the few bright spots in an otherwise sluggish tourism market for Oahu, cab companies have been jockeying to get a piece of the terminal business, even as the permitted drivers have zealously tried to protect their exclusive rights.
Sometimes the turf struggles have turned ugly.
On several occasions, cruise passengers have exited the terminal only to find cabbies trading punches or arguing, according to industry officials.
"It's just a ridiculous mess that we've been dealing with all this time," said Troy Brown, an executive with Waldron Steamship, which serves as a local representative for cruise lines.
Howard Higa, president of The Cab, said allowing unauthorized drivers to make pickups at a terminal crowded with people raises questions about safety.
"These independent drivers aren't really registered with anyone," Higa said. "In case something happens, the harbors are at risk."
Dale Evans, president of Charley's Taxi, raised other concerns. There's no assurance the unauthorized drivers have valid licenses and insurance, and they could charge their passengers inflated fares to recoup the payola expense, she said.
"The big problem I see with the kickbacks is the public pays," Evans said. "The passenger is cheated."
Some cab companies aren't so critical in their assessments.
Robert Deluze of Robert's Taxi and Shuttle said he doesn't condone the kickback practice, but understands why the drivers, some of whom he knows, do it.
"This is what they have to stoop to, to survive," Deluze said.
Kickbacks are not uncommon in Waikiki, where some cabbies pay hotel bellmen or front-desk personnel to get calls when guests need taxis.
The issue of unauthorized drivers picking up terminal passengers has been raised a number of times with the state, but each time the agency has been unable to substantiate the allegation, according to department officials.
Prior to 9/11, the state had issued 14 permits to drivers to service the terminal area. But two weren't renewed after the state beefed up its security around the harbors. The changes included closing off the garage area at the terminal to taxis.
The 12 authorized taxis aren't sufficient to handle the demand for cabs, acknowledged Okimoto, the deputy director.
"I understand it isn't the best system in the world," he said.
Asked what the state has done over the years to improve the system, Okimoto replied, "We haven't done much, frankly."
The department has had few resources to tackle the problem, and the existing revenue it gets from the permits -- drivers pay $31.25 for quarterly renewals -- doesn't amount to much, he added.
Since last summer, however, the department has been working on a proposal that Okimoto believes will lead to improvements. In a few months, the state plans to solicit bids for a contractor to manage the terminal operations, including the taxi concession.
Whether that will lead to better cab service remains to be seen. But one thing's for sure: The system can hardly get worse.
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.
