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D.C. Taxicab Commission Says It Doesn't Inhibit Innovation

Thursday, June 06, 2013 - 10:22 AM

(Chris Chester/WAMU)

The D.C. Taxicab Commission is deflecting criticism its regulations inhibit consumer-friendly innovations, even as tech companies again accuse District regulators of needlessly snarling their smart phone e-hail apps.

In an interview with WAMU 88.5, Ron Linton, the taxicab commission chairman, said the rise of "digital dispatch services" has forced regulators to strike a balance between innovators and the traditional taxi industry.

“We have responded rapidly to a fast-changing situation. We are using the marketplace,” Linton said.

Seven tech companies currently operate smart phone apps in D.C. that allow passengers to hail and pay for cabs using their digitally-stored credit card numbers. Two of the companies, Uber and mytaxi, say their apps’ payment functions could be killed by pending regulations.

By September 1, all taxicab drivers will be required to install credit card payment machines in their vehicles. This will allow passengers to swipe their cards to pay their fares. But the tech companies say a commission mandate to integrate their own smart phone payment systems with the payment service providers chosen by taxi drivers could force them to shut down.

“This has never been done anywhere in any city in the U.S.,” said Rachel Holt, Uber’s general manager in Washington. “We literally don’t even know how difficult it will be to integrate because no one’s ever successfully been able to integrate before.”

Uber is used to fighting the D.C. Taxicab Commission. In a resolution to a series of highly publicized clashes last year, the District created a new sedan class of vehicle-for-hire to accommodate Uber’s presence in the city. Mytaxi, which claims to have roughly 1,000 drivers using its app in D.C., has had no complaints until now.

“With the new regulations our product won’t be able to function on the market anymore unless we try to fulfill the new DCTC requirements,” said mytaxi spokeswoman Lina Wuller. “It will be a huge loss for our product.”

Mytaxi app users will only be able to hail cabs if the company is unable to integrate with any of the 13 payment service providers taxi drivers may choose from.

Taxicab Commission anticipates no problems

Chairman Linton says he does not understand what the problem is. “There is really no technical barrier.”

Smart phone apps must integrate their payment system to protect consumers from credit card fraud, Linton said. Without integration, cabbies would have to manually input credit card information and fare amounts into smart phones, creating opportunities for abuse.

“We’ve left everything to choice and there is no technical advance that will not function that we are aware of at this point,” Linton added. “It’s exactly what they do in New York.”

Not exactly, said Holt. Uber and the tech company Hailo were approved for an e-hail pilot program in New York that did not include e-payments, and a lawsuit against the city’s Taxi and Limousine Commission has put the program on hold anyway.

“The [DCTC] wants to basically transmit price information automatically from the taxicab meter into the app. This has never been done in any Uber city and, to the best of my knowledge, anywhere in the world,” Holt said.

So what will happen to Uber Taxi come September? “I’m not sure,” Holt said. Uber’s officials are exasperated that the possibility of a problem even exists.

“I can’t even begin to tell you what’s going to happen on September 1 because in the last two weeks the rules have changed three times,” Holt added. “In the last year alone there have been eight sets of proposed regulations that would meaningfully change our business.”

DCTC not “a dinosaur”

Chairman Linton rejects the notion that his office is hostile to innovations. He bristles at the suggestion he has been at war with Uber, insisting his responsibility is protect consumers and the District’s $250 million taxicab industry in a highly competitive climate.

“If we give an exception to one company the law is going to require that we give that exception to all,” Linton said. “It’s not us against Uber. Uber is just one company struggling to dominate the city’s public vehicle-for-hire industry. We’re here to balance everybody’s struggle with each other in a competitive marketplace.”

The DCTC has seemed to be in a struggle against itself at times. The effort to get credit card payment machines into cabs suffered several delays, for instance.

“This is not an organization that has generally been on the forefront of technical innovation. I’d be very surprised if suddenly they had bounced into the future,” Uber’s Holt said.

As taxi drivers continue to install their credit card swipers, passengers will pay different fares depending on which taxi they hail. Cabs without the credit card option will continue to charge a base fare of $3.00. But once a cab installs a credit card machine its base fare will jump to $3.25 plus a $.25 surcharge, and those taxis will be allowed to charge $1.00 for any number of extra passengers.

“I think it is an unfair accusation to view us as a dinosaur,” said Linton, who said many of Uber’s accusations have had no basis in fact.

If history provides an indication, as technology continues to emerge in D.C.’s vehicle-for-hire industry so will the wrangling with regulators.

Come September 1, the tech companies say payment system integration will not work. The Taxicab Commission says there will not be any problems.

In the middle are consumers whom both the innovators and regulators claim they are trying to protect.

Follow Martin Di Caro on Twitter.

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Comments [3]

Uber is the one holding back innovation here -- they are trying to prevent fleetwide improvements to DC taxi service so they can hold a competitive edge. Uber is trying to establish a monopolistic nationwide political presence so they can dictate taxi policy in every city to suit their own whims.

Jun. 07 2013 12:07 PM
L Silva from San Jose, CA

Come on Rachel, you guys can take orders, find the nearest car, provide relevant information to the driver, track the trip, give e-receipts and process payments and you cant figure out how to process the payments though another service??? Maybe you just make most of your revenue off the transactions through your own processing service! It's all about the money!

Jun. 06 2013 06:50 PM
TTF

And DuffMan said she'd win the contest if she slept with him...

Jun. 06 2013 12:05 PM

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