Most Read: Local

Posted at 01:16 PM ET, 07/27/2012

Uber CEO Travis Kalanick talks big growth and regulatory roadblocks in D.C.


Kalanick, seen in a Bloomberg interview earlier this month. (David Paul Morris - Bloomberg)
UPDATED 7:30 P.M.

Uber CEO Travis Kalanick played city hall lobbyist this week, visiting D.C. Council members in the John A. Wilson Building to build support for the San Francisco-based luxury car service. Uber’s eight months in the D.C. market have been wild — its service has been wildly popular among users and wildly controversial among regulators and some legislators. Earlier this month, Kalanick had to foment a social-media rebellion of sorts to defeat a provision in the recent taxi-reform bill that would have complicated Uber’s plans for a lower-priced service.

Kalanick sat down Thursday to talk about Uber’s D.C. saga. The interview has been condensed and edited for flow, clarity and to make my questions more concise and intelligent-sounding than they might have actually been.

Me: So this is not something you’re used to, having to talk to politicians?

Kalanick: This is the first city where we’ve had to talk to a legislative body. It’s the first city we’re in that is proposing legislation to sort of restrict our market. So that’s a new thing.

What do you think is the difference between D.C. and other places Uber operates ? Is it just that government is part of what D.C. is?

I think the taxi industry is very well embedded in the government, and I think that’s the difference. It’s not the case in any other city that we’re in.

What are the council members telling you?

There are city council people who are big supporters of what we stand for and who we are. [He named Michael Brown (I-At Large), David Catania (I-At Large), Jack Evans (D-Ward 2) and Tommy Wells (D-Ward 6).] Those guys are supportive, and they want to find a way to make sure that Uber can keep doing the good that we think we’re doing. There are folks who are not in that camp. I think they still see the good that we’re doing, but I think they’re wrestling with other interests involved, including the taxi industry and I think they’re trying to figure out where to land.

So what kind of case do you make to those members who are “wrestling”?

Look at all the driver jobs that Uber creates — hundreds today, probably thousands over the long run. Those are better-paying jobs where drivers can make a much better living. That’s an easy argument to make. Then look at accessibility. The taxis sort of concentrate in central areas, the western parts of the city. What about all those other areas? We can make sure that more people have access to transportation.

Have you met with Marion Barry yet?

Not yet. I have an offer for Marion. I will personally chauffeur him myself in his silver Jaguar to work every day of the week, if he can just make this happen. We had to calculate what the value of me driving his car would be to make sure it would fall inside the contribution limits.

This is where charging by both time and distance is very important, because you’ll be stopping on every corner. People will want to talk to him, and he’ll want to talk to them. You’ll never get to your destination.

This trip could take longer than I expected. I didn’t know that.

So what happened earlier this month with the taxi bill? Mary Cheh (D-Ward 3), who wrote the bill, said she thought she had an agreement with you about the language.

We always made clear that we were not okay with a floor on our price, and that was unacceptable. So the notion that there some sort of deal or arrangement or whatever was just not the case. [UPDATE, 7:30 P.M.: Cheh continues to dispute that point, and her office provided an e-mail today showing an Uber lobbyist negotiated with her over a fare floor.]

How important to you is it to have certainty around laws and regulations going forward?

The question is, do you have regulators that care about the law? If you take a look at the law before this most recent taxi bill, it’s pretty clear we’re operating legally. It’s clear! And then you have the head of the D.C. Taxicab Commission saying it is illegal to charge by time and distance, and that’s just not true. So for us it’s not as much about the regulations, because clearly we felt we were legal to begin with. It’s more about, look, if somebody wants to test that in a court of law, we’re happy to go there. We have to be, because it’s questioning our existence. You have to be willing to stand up for what you believe in, and the rule of law is one of those things.

Right now you have a six-month reprieve from any regulation. What would you like to see happen after that?

Our perspective is the law as it is today shouldn’t sunset. That should just be the law we operate under. It’s just that simple.

As a philosophical matter, do you believe there are legitimate reasons to regulate for-hire vehicles, generally speaking?

Limo and sedan companies, as far as you go back, have been regulated in the District. The question is the difference between a limo or sedan and a taxi. The difference is, with a taxi, I put my arm out, and an anonymous person can get into an anonymous person’s car. And because of that anonymity, there are certain regulations about making sure when I get in there, I know what I’m supposed to get. I think that’s the fundamental reason for some of the regulations in the taxi world. Limos, from the beginning of time, they know who they’re picking up, they usually have a credit card on file, they know where the pickup location is, and so there’s essentially a prearrangement of sorts, and, of course, the limo customer knows the driver, knows the company, knows the rates. All we’ve done is make it more accessible. It doesn’t make it a taxi, it makes it a limo that’s accessible to more people.

Setting aside the regulatory issues, what else is different about D.C.?

We’re not really sure exactly why, but D.C. really, really likes our product a lot. That is reflected in our growth, and the sort of overall demand we’ve seen has been unprecedented. I’m going to guess we’re in the 30 to 40 percent range month over month. The thing is, if you do 35 percent month over month for six months, you’re six times bigger than when you started. If you do it for 12 months, you’re 36 times bigger. We’re growing really big in lots of different cities around the country and around the world, but this city is growing faster.

Does that reflect that people are not happy with their alternatives here?

I think one can make that conclusion.

Can you tell me how many rides per day you’re doing now?

No.

That’s in the I’d-tell-you-but-I’d-have-to-kill-you category.

We don’t kill anybody, but we also don’t tell anybody. What I will say is there are hundreds of drivers on our system now, and it’s growing fast.

Given that rate of growth, can Uber scale up quickly enough? Are you having problems finding enough cars and drivers to meet the demand?

There are a lot of drivers in this city who are out of work. Because of that, there are a lot of drivers and limo companies that are coming to us to basically help their drivers make a living. When you think about a taxi bill that’s going to make the requirements come up, which is probably good for the city, but it’s going to probably reduce the number of taxis in the city, and you’re going to have a lot of drivers out of work because of it.

So you’d agree there is some zero-sum aspect to this — that Uber’s growth comes at the traditional taxi industry’s expense.

I do take some issue with that. The ability for somebody to put their arm out and get a taxi is fundamentally different then having a 10-minute pickup time. It just is. We’re been doing meetings the last couple of days. We’re been taking taxis to get around, and that’s okay. We feel like we’re friendly with drivers, because we’re creating driver jobs that are good paying driver jobs. A large portion, if not a majority, of the drivers on our system are former taxi guys.

How do you see this market settling out in the end?

Look at New York. They’ve had lots of black cars all over the city for decades, and the sky hasn’t fallen. I can get livery service in New York for cheaper than a cab. But guess what? The cabs are doing great. They continue to do great business. Again, I have taken taxi trips while I’ve been here, and I work for Uber! This is my company! Being Uber means being efficient. Sometimes that means taking a taxi.

What do you say to the people who are really threatened — the cab company owners, the other folks invested in the current regime?

They have the opportunity to get sedans. In a lot of the cities we’re in, there’s a number of taxi companies that also own limo companies.

You have a new, lower-cost product, UberX, that you now offer in New York and Chicago. Is D.C. a place you’d like to roll that out next?

With the legislation, there’s enough uncertainty that we’re still trying to figure out what we should do. One of the things we did in Chicago is, we partnered with taxi drivers and the taxi industry generally. Our low-cost option in Chicago is taxis. The question is, can you make a taxi Uber, and those taxi drivers, and we’ve got a number of them making several hundred dollars a week extra because they’re on the system.

Of all the things you’re worrying about in terms of managing and growing this company, where does this regulatory issue in D.C. fall?

We’ve got lots of cities. This is one of 14 cities, and it’s about to be one of 17 cities. I get involved in strategic issues in the company, and this is a new one. So here I am.

I hope you are as talented a lobbyist as you are an entrepreneur.

I know this city’s full of lobbyists, and that’s part of how the city rolls. The way I look at it is, I hope to be a talented entrepreneur, and I hope to make the voice of the entrepreneur part of the dialog.

There is sort of cultural conflict here, right? How do you perceive that?

I mean, I perceive it. I’m getting a little bit of the — what do they say? — some of the southern efficiency and the northern charm of D.C. I’m getting a little taste of that cultural dissonance.

I’m glad we could oblige.

I’d like to say that opposites attract.

I noticed your Twitter avatar is the cover of Ayn Rand’s “The Fountainhead.”

I don’t know what you’re talking about. [Laughs.] It’s one of my favorite books. It’s less of a political statement. It’s just personally one of my favorite books. I’m a fan of architecture.

The Randian philosophy has come to bear on this situation, you would admit.

That’s probably true. I’d say there’s an uncanny resemblance, especially on the “Atlas Shrugged” side.

By  |  01:16 PM ET, 07/27/2012

 
Read what others are saying
     

    © 2011 The Washington Post Company