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"From the Draconian to the Inane:" Uber Taxi App vs D.C. Regulators

Tuesday, September 25, 2012 - 10:36 AM

(photo by Martin DiCaro)

(Washington, D.C. -- WAMU) A pitted battle in Washington, D.C. over taxi technology, rights and safeguards turned testy Monday, with hints at compromise as well.

The chief executive of a rising, internet-based sedan-for-hire service accused D.C. regulators of pushing “crippling requirements” that threaten to drive its partners out of business, during a day-long hearing before a city council panel.

Uber CEO Travis Kalanick said proposed regulations range from “the draconian to the inane,” pointing to one rule that would require sedan companies with which it partners to possess fleets of at least 20 vehicles.

Uber allows customers to order rides directly from its smart phone app, a work around to regulations common in many cities that license and regulate which cabs can be "street hailed." In D.C. "black cars" may not be hailed on the street, but with Uber they can be summoned through a few clicks. Passengers are billed to their credit cards and receipts are emailed. Uber charges a base fare of $7 plus time and distance; drivers keep 80 percent of the total fare.

Kalanick criticized a slew of proposed regulations, saying “grey areas” could lead to interpretations that would harm his business. The CEO’s testimony reflected his faith in the marketplace: if Uber drivers don’t do their jobs well there will not be demand for his product.

“It sounds like hyperbole but so many of our customers literally feel like we have changed their lives,” Kalanick testified. “We hear from families that chose to sell their second car, couples who can finally go on date night in hard-to-reach areas, and from women who feel totally comfortable heading out of their office late at night because they have a photo, license plate and phone number of their driver.”

Monday’s testimony marked the latest move by Uber and district lawmakers to find common ground as the D.C. Taxicab Commission (DCTC) attempts to protect the city’s own regulated taxi industry from a completely unregulated enterprise.

Uber announced it would equip yellow cabs in New York City with the service pushing the NYC Taxi and Limousine Commission to remind its drivers they cannot accept prearranged rides, nor use mobile devices while driving, pending a review of regulations. Uber plans to find a way to expand in New York City.

D.C. Taxicab Commissioner Ronald Linton has called Uber “arrogant.”

“The commission is in the process of adopting a regulation to add a new class of public vehicle-for-hire known as the sedan class for consideration and approval. This new class of service shall provide for rules to provide minimal regulatory requirements,” Linton testified on Monday. “I would also emphasize that this is a proposed regulation.”

D.C. Councilmember Mary Cheh, who chaired the Environment, Public Works, and Transportation Committee hearing, sought a conciliatory tone during Kalanick’s testimony, but the CEO refuted her claim that the district is attempting to work with Uber, not against it.

Cheh conceded that some of the proposed regulations may not make a lot of sense and suggested that Kalanick might be misreading the proposal to require sedan companies own at least 20 vehicles.

“The attorney general has read those regulations… you don’t have to have 20 taxis. So I’m not defending that. I’m just saying the rhetoric about the [regulations] being designed to put companies out of business or eliminate them is a little over the top and not correct,” Cheh said.

“I’ve read the regulations,” responded Kalanick. “And we’ve had my attorneys read them and I’d say at best it’s a grey area,” referring to confusion about rules governing the differences between taxis and sedans.

“That may be true,” Cheh said. “But I just wanted to make a statement… that these regulations are not law. I don’t want the rhetoric of the taxi commission trying to put people out of business to take hold.”

“But that is the reality of it,” Kalanick responded, adding that the DCTC “has been on the attack since the moment we got here.”

Proposed restrictions on makes and models and requirements that sedans only be painted by the manufacturers would add unnecessary layers of regulations that serve no purpose other than to make doing business in the district difficult, Kalanick said.

Uber sedan driver Saad Hamadi, who owns a single town car, testified that fleet requirements would drive him out of business. “The requirement for most cars to be 2009 and newer would cause me hardship because it is a 2008 model. It’s clean, looks nice inside and out, and my customers have never complained about its age.”

Despite the testy exchanges, Councilmember Cheh sought to emphasize that the district wants to welcome innovative companies as the landscape of vehicle-for-hire services changes. Earlier this year a survey posted to Cheh’s website revealed deep dissatisfaction with D.C. taxis among the public, a reason Uber supporters say the sedan service should be left alone: if the city-licensed taxis were more dependable Uber sedans wouldn’t be so popular.

Uber’s flexible pricing policy is considered by regulators to be unfair to the city’s taxicab industry because it allows Uber drivers to raise their prices during periods of high demand while traditional taxis charge a set minimum fare plus mileage and time measured by dashboard meters.

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