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Posted at 02:11 PM ET, 09/20/2012

Uber strikes back after taxi commission moves to regulate sedans


Uber CEO Travis Kalanick renewing his objections to city regulation of his business. (Bloomberg)
The Uber wars are about to heat up again, big time.

On Wednesday, the D.C. Taxicab Commission moved to publish rules establishing a “sedan class” of vehicles for hire that would encompass smartphone-based dispatch services like Uber that utilize luxury cars.

The regulations, among other things, would require drivers and companies to obtain licenses to be renewed annually; require companies to operate at least 20 vehicles, with at least 10 percent wheelchair-accessible; require said vehicles to be a “full sized four-door sedan that is black in color as painted by the manufacturer and classified by the manufacturer as a luxury vehicle”; and require sedan trips to “originate and end in the District of Columbia” — except as provided in current interstate compacts, which generally allow D.C. vehicles-for-hire to pick up or drop off outside the city as long as the other end of the trip in inside the city.

Also in the proposed rules: “Demand pricing for sedan service is prohibited” — a direct shot at a key part of the Uber business model, which hikes prices during periods of high demand to guarantee car supply.

As you might imagine, Uber is none too pleased. Outspoken CEO Travis Kalanick sent a letter to D.C. Council members today decrying the commission’s “crusade to shutdown Uber’s business in the District and limit transportation options for your constituents.”

“The set of regulations can only be described as anti-competitive — at the expense of 1000’s of high-paying D.C. driver jobs, stifling innovation, and against the interests of city residents who need quality transportation alternatives,” Kalanick wrote.

The rules, he added. “are not designed to promote safety, nor improve quality of service. They are intended to shut Uber and similar technology companies down.”

And Kalanick promised he would unleash Uber users on the council, much as he did when legislators tried to write a “fare floor” into new taxi laws earlier this year: “Uber’s response has to be strong,” he wrote. “We expect that your constituents will make their voices heard against the clear and present threat to Uber’s business in the District and to the businesses of the sedan drivers they’ve come to love.”

Commission Chairman Ron M. Linton said Kalanick is being overly alarmist. “There’s nothing in there that shuts them down,” he said. “I don’t know how they arrive at that conclusion.”

Specifically, he noted, the 20-car rule would apply only to companies that actually own cars, not a dispatch system like Uber. And, Linton added, the commission has been convinced that the company’s smartphone-based metering is accurate and suitable — resolving an issue that got Uber briefly in trouble in Massachusetts this summer.

Before the commission’s proposed rules take effect, they will have to be published in the D.C. Register, undergo a hearing and a 30-day comment period, then perhaps be revised, published and commented on anew. Meanwhile, the D.C. Council is still figuring out for itself what it wants to do about Uber-type services; its wishes more or less govern what the Taxicab Commission ultimately does.

“The council obviously has superior authority,” Linton said. “We will obviously take our lead from what the council decides is its public policy.”

High noon in this shootout promises to be at a council hearing set for Monday morning, where lawmakers will discuss the ins and outs of regulating (or not regulating) Uber-type services.

By  |  02:11 PM ET, 09/20/2012

 
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