The World of Towing in Hawai‘i

Tow This: It’s a necessary part of city life, but it’s also one of the most hated. A look into the rough-and-tumble world of towing.

It’s one of life’s worst little moments: returning to your parking spot and finding only an empty space.

The towing business might be a necessary one—without it, our roads and parking lots would be clogged with ne’er-do-wells and broken-down heaps—but it’s also one of the most hated industries around, and no wonder. What other private entity can, without notice, seize a piece of your personal property worth tens of thousands of dollars, haul it miles away and then hold it for ransom? It’s a galling experience in the best of circumstances, but there are always shady tow operations that find a way to pile insult onto injury.

We decided to take a closer look at how the towing industry works, and what you need to know in the event that you get towed.

As you might expect, towing incidents tend to spark a lot of complaints. Both the Hawaii state Department of Commerce and Consumer Affairs (DCCA) and the Better Business Bureau regularly receive reports of overcharging, damaged vehicles, rude behavior on the part of tow-truck operators and unwarranted tows.

The resolution rate of towing companies tends to be low, as well: The Better Business Bureau says that in the past year, 14 percent of the complaints on which it followed up were satisfactorily resolved by the companies involved.

In some instances, the complaints even end up in the court system. In 2009, the DCCA successfully sued two local tow companies on a list of charges including mileage padding, illegal overtime charges, failure to provide proper receipts and accepting only cash payments.

It’s important to note that these kinds of complaints aren’t universal. Peruse the Better Business Bureau’s listings for local tow companies, and it becomes clear that there are many above-board towers out there, with zero registered complaints and A ratings from the BBB. It’s a select few companies that rack up the offenses.

The latest legal kerfuffle over towing involves the Ala Wai Small Boat Harbor parking lot. A group of local attorneys is pursuing a class-action lawsuit against Diamond Parking, Gino’s Powerlift Towing and the state of Hawaii, among others, alleging that more than 1,400 people whose vehicles had been towed from the lot didn’t receive the due process to which they were entitled, including the opportunity to contest the validity of the tows.

The problem started in 2008, attorney Richard Gronna says, when Diamond Parking took over the management of the harbor parking lot. The lot has long been tight on parking, thanks to the demand created by nearby popular surf spot Rockpiles, as well as the Yacht Club and the hundreds of boats docked at the harbor, but under Diamond Parking, the number of tows jumped dramatically—from two or three a day to more than a dozen.

“These towing companies came in and started wielding these draconian policies. In our review of the cases, it was evident that they were abusing the system and taking advantage of people,” Gronna says.” They weren’t providing any opportunity for a hearing after you got towed, to contest whether it was proper or not.”

Nathan Contreras, a project manager with Swinerton Builders and frequent visitor to the boat harbor, isn’t a party to the suit, but says he’s been nailed repeatedly by overly aggressive towers at the harbor parking lot. “I’ve gotten towed from there four or five times in the past few years. The Gino’s guys live down there. I see three or four tow trucks in that tiny area constantly.”

The most recent incident, he says, was in January, during Pro Bowl weekend, when he visited a friend who has  a boat at the harbor. Contreras says he dropped $10 into the parking dropbox, which, at the lot’s rate of a dollar an hour, should have covered him through midnight. Just a couple of hours later, though, he saw his Toyota FJ Cruiser being hooked up by a Gino’s driver. “I ran out there and he immediately started arguing with me. I said, Hey, I kinda feel like I’m getting screwed here. You need to put my car down, and we need to talk about this.” The tow-truck driver refused and would have driven off, but Contreras and a friend stood in front of the truck to block it until the police arrived. In the end, Contreras says, he was forced to pay the driver $20 in cash to get his car back.

“I’m at the point now where I would rather take a cab down there than risk my car. I can go anywhere else in Waikiki and not worry, but as soon as I get into the Ala Wai Boat Harbor, forget about it.”

As we went to press, the class-action lawsuit was still awaiting certification, but it’s already had an impact: the state Department of Land and Natural Resources has begun offering hearings to vehicle owners who have been towed. Chris Dias, one of the lawyers pursuing the lawsuit, says, “We’ve attended a couple of them, but it remains to be seen whether they satisfy the constitutional requirement. It has to have both form and substance; it can’t just be a rubber stamp.”

Diamond Parking and Gino’s Powerlift Towing could not be reached for comment.

To Drop or Not to Drop

Because of the involuntary nature of many kinds of towing, the industry is strictly regulated. State law dictates the maximum rates that a towing company can charge, and there are numerous requirements designed to protect consumers.

One of the newest towing protections has turned out to be a controversial one. In 2008, the state Legislature passed a law addressing one of the most frustrating experiences in towing: the scenario in which you catch a tow-truck operator in the middle of hooking up your car. Tow operators used to be able to charge a fee of $50 or more, and the late-night, on-the-scene negotiations with surly operators were notoriously stressful.

Under the revised law, if you show up while your vehicle is still “on the scene,” the tow truck operator is required to unhook it, without charging you.

It was a step forward, but, three years later, there are still tow-truck operators extracting drop fees from car owners who don’t know any better.

David Richardson, a local wedding photographer, recalls parking on a side street behind American Apparel in Waikiki a year and a half ago and returning to see his car jacked up on a tow truck. “I asked the two guys if they could take it down, and they said no,” he says. “I asked if I could pay them money now, to save them the trip. They said, no, we already did all the paperwork. I was persistent, and finally the guy said, All right, give me $80 and I’ll take it down. I figured it was better than paying $150. I didn’t get a receipt or anything—I kind of figured I was bribing them. I didn’t know about the law.”

Even among tow companies that don’t resort to illegal charges, there’s a lot of disagreement as to what exactly constitutes “the scene.” Many tow-truck operators argue that once they move the car a few feet—that’s it, no free drop.

“I used to tell my guys, if it’s in the stall, and they come back, just give them back the car. It ain’t worth the headache,” Kapena Koki, former owner of Mauka Towing and Recovery Services, says. “But if you’re out of the stall, and you’re starting already, they gotta pay. Most guys, once they start moving, even a foot, that’s it.”

Steve Levin, director of the DCCA, disagrees. “Some of the operators claim that, once they’ve moved the vehicle, it doesn’t apply to them. It’s a very narrow view, which, frankly, the Office of Consumer Protection has disagreed with over the years. The spirit of the statute is that if you show up to the scene, they need to drop the vehicle.”

Barney Robinson, owner of Chevron stations on Waialae and Nimitz, and a longtime towing-industry advocate, says it’s not always so cut and dried. “When you’re sitting in a nice air-conditioned office, sipping iced tea, that’s one thing. In the real world, the guy is coming at you with a bat or a gun. You have to make decisions.”

Robinson calls the current law problematic, and says it actually works against the consumer. “There were situations where we were willing to stop and collect the fee, but now we don’t stop, we just takeoff, and the guy has to pay the hookup, the storage, the mileage and it’s more than that original $50,” he says.

He says he’ll likely be at the state Legislature next year, asking for a reinstatement of the drop fee, as well as an increase in the maximum allowed towing rates. It’ll be an uphill battle, of course. Few causes are as unpopular as those of the tow-truck operator.

Living by the Hook

So why get into towing, if everyone hates you? For Koki, it was the idea of being out and about while working. After getting a taste of the industry watching the lot at his uncle’s tow company in high school, Koki trained as an auto mechanic before realizing he didn’t like being cooped up in a garage all day. He would go on to drive for most of Oahu’s large tow companies, including Ace Towing, Kuni’s Auto Service, Tow Masters Hawaii, All Island Towing and Islandwide Towing, before starting up his own company, Mauka Towing and Recovery Services. In the 15 years he’s been in the business, Koki has done everything from roadside assistance to repossession towing, and has experienced the highs and lows of the business, including being shot at twice.

“I picked up a car at Kam IV Housing on Likelike Highway,” he recalls. “I started driving down the street, and I see this guy running with a long towel. I thought, oh, that’s no towel, I know what’s under that.” It turned out to be a gun. “He’s gaining on me, and I hear the thing go off. With my controls, I lifted the car real high, so now it’s blocking me. He’s running down the Likelike by this point, and he’s shooting at his own car, because it’s in the way of me. He finally got tired and stopped. The worst part was that the car was only worth $500. It was a Toyota Celica or something.”

Koki says he’s learned to defuse tense situations by speaking quietly—in a literal sense. “If you come off hard, he’s going to be hard back. He’s ready to go,” he says. “I’m a bigger guy, but if I talk soft, he has to calm down and lean in to be able to hear me.”

Towing will always be a confrontational business. But it’s also a potentially lucrative one, with relatively low startup costs. New tow trucks can cost $75,000 or more, but you can pick up a used truck for $10,000 to $15,000. Koki started his company with a tow truck he bought for $2,500. Add in a $1,200-a-year insurance policy, and he was in business. “In about two weeks, I made my money back,” he says.

He remembers making $10,000 in a single month, by himself, hustling long days and towing abandoned cars for $50 a piece. “I had enough to buy another truck, and hired a friend to work with me. We slowed the pace after that, but it was good money.”

For the large tow companies, the big money is in government contracts. Stoneridge Recoveries, for example, handles the police tows for the region spanning downtown Honolulu to Makapuu, and averages 10,000 tows a year in that area. Such a privilege doesn’t come cheap, though—Stoneridge pays $21,000 a month for that one contract, and the general rule of thumb is that 45 percent to 60 percent of the gross income goes straight to pay for the contract fee.

Smaller tow companies make their living on roadside assistance tows and by signing contracts with private entities such as businesses and condominium associations to handle their parking violations—known in the biz as “trespass towing.” These private contracts generally don’t cost a tow company anything, but it’s up to the tow-truck operators to make the commitment pay off. Think of the contracts like hunting licenses. When you see tow trucks lurking in the corners of a parking lot, or lining up half an hour before a no-parking deadline kicks in, they’re just making sure they bag as much game as possible.

If you’re a tow-truck driver, not an owner, you may also be additionally motivated if you’re getting paid by the tow. Koki says the average payout is $20 to $25 per car, and if an average tow job takes about an hour, the advantages of squeezing more tows into the workday are clear. As a result, many of the larger tow companies pay hourly, to keep drivers from cutting corners. “Drivers with incentive like that are gonna push,” Koki says. “They go like crazy. You see trucks going past and you’re like, ho, brah, where you going? Slow down!”

When it comes to tows on private property, the level of aggressiveness is often set by the property manager and by the security guards. Spots such as the Ala Wai Small Boat Harbor are an example of the upper extreme, but many other properties are content with mellower parking policies.

Lillian McCarthy, a property manager with Hawaiiana Management Co., whose projects include Royal Kunia, Five Regents, Royal Court and Manai Hale, says she’s been using her towing contractor, Sniffens Auto Express, for years, because its towing style offers a minimum of headache, for her, both in guest parking violations, and in complaints from tenants. “We want someone responsive, but not someone who is aggressive and hunting,” McCarthy says. “If the tow company is overcharging and all that, they’re not going to have our business. The people who reside on our properties are our customers and our clients. We have to be fair with them.”

McCarthy has experienced the opposite approach, too. She recalls managing a Kaneohe property in which the residents’ board deliberately contracted with the farthest towing company they could find, in Kapolei, on the theory that huge towing bills would discourage parking abuses.

Koki, for his part, has slimmed back his business to one tow truck, and does mostly roadside service calls these days. “The money’s not the same,” he says, “but there’s more peace of mind, knowing that someone wants you there, instead of them wanting to kill you.”

KNOW YOUR RIGHTS

Drop That Car

If you get back to your vehicle before the tow truck leaves with it, you’re in luck. Hawaii law says, “If the vehicle is in the process of being hooked up or is hooked up to the tow truck and the owner appears on the scene, the towing company shall unhook the vehicle and shall not charge any fee to the owner of the vehicle.”

Make the Call

Signage explaining where your car has been towed is legally required, but if you can’t find it, call the police. Tow-truck operators must notify the police before taking a vehicle, so there will be a record of who has your car. And if it turns out your car was actually stolen, hey, you’re already talking to the right people.

Don’t Get Overcharged

These are the maximum rates allowed by law for cars towed from private property:

Towing charge:

No more than $65, or $75 for a tow using a dolly.

Mileage charge:

$7.50 per mile towed. There is no maximum mileage charge, but the tow company must use the most direct route to its lot.

Storage charge:

$25 per day or fraction thereof for storage for the first seven days and $20 per day thereafter.

Additional charges:

When the tow occurs between 6 p.m. and 6 a.m., from Monday through Thursday, and from 6 p.m. Friday through 6 a.m. Monday, the towing company can assess an overtime charge of $15. If it’s a difficult hookup, meaning an above- or below-ground hookup in a multilevel building, a towing company can also apply a surcharge of $30.

Making Payment

In addition to accepting cash, the towing company must either accept payment by credit card or provide an ATM on the premises.

Get Documentation

The tow company must provide the vehicle owner with a receipt stating the maximum towing charges and fees allowed by law, as well as the phone number of the DCCA.

What’s Next?

If you were overcharged, unfairly towed or would like to file a complaint against a tow company, contact the Hawaii Consumer Resource Center, Department of Commerce and Consumer Affairs, at (808) 587-3222, or visit hawaii.gov/dcca/ocp. Your case could be assigned to an investigator, prompting anything from a refund of charges to a lawsuit against the tow company by the Consumer Protection Agency.