Uber wars threaten to reignite over new regulations


Uber says its “cheap, classy rides” are again under regulatory assault. (Bill O’Leary/The Washington Post)

Six months after city officials and Uber settled conflicts over regulation of the app-based transportation service and jointly declared peace in our time, conflict again threatens to erupt — this time, over new sets of regulations being considered by the D.C. Taxicab Commission that Uber claims could severely impact its business.

Regulations passed last week by the commission — the same one requiring all city taxicabs to accept credit-card payments — also include requirements that payments be processed through “payment service providers” that are integrated with the cab’s on-board meter system. That requirement, Uber said in a May 3 letter to the commission, “is not practical for a software-only company like Uber.”

Uber CEO Travis Kalanick said Thursday that the new rules, “as far as we can tell, require us to shut down Uber Taxi” — the part of the Uber app that hails a traditional taxi cab rather than the luxury black cars the company is best known for. The rules, he said, would require Uber to associate with payment providers who are integrated with the taxi hardware in order to maintain Uber’s model of processing payments entirely via smartphone app.

And Kalanick says another set of regulations now in development affects the sedan service in significant ways — including a ban on cars weighing under 3,200 pounds, which he says would encompass most “eco-friendly” vehicles. Also troublesome, he says: a requirement that companies would have to share ride data with the commission for analysis and planning purposes, creating what he feels is a “substantial privacy problem” for Uber customers.

“Do you trust the D.C. Taxicab Commission with your whereabouts?” he asked.

The company has submitted comments on the taxi regulations to the commission, with comments on the sedan regulations likely forthcoming. Company reps have also taken their case direct to D.C. Council members, who have a limited to nonexistent role in the rulemaking process.

Uber D.C. general manager Rachel Holt and company lobbyist Jon Bouker met with D.C. Council member Mary M. Cheh (D-Ward 3), the transportation company chairman, on Wednesday to discuss the company’s concerns. David Grosso (I-At Large) said he’s also gotten involved and is considering introducing emergency legislation if the matter isn’t resolved in the rulemaking process. “I have a draft ready to go, but I’m not going to put anything in till we work through this,” he said.

Cheh said she’s hoping the council can stay out of it. “I think whatever their concerns are … we’ll get them resolved,” she said, adding that she is not pleased that Kalanick has yet again gone public with his displeasure with the city’s regulatory efforts: “I do wish they would at least give me a chance to sort this out.”

Taxicab Commission Chairman Ron M. Linton was more direct, saying he would not let the rulemaking process be taken hostage by Uber’s threats. Other companies, he said, have offered similar comments which will be considered by the commission in due course.

“As regulators we don’t negotiate with individual parties when we’re dealing with regulations that affect multiple parties,” he said. “We’re not trying to twist anyone here. We have a process, a system which allows us to monitor and protect the consumer that makes sure everything is done under the law.”

Update, 8:20 p.m.: In case there was any doubt, yes, Uber is now rallying its customers to oppose the regulations, something that has proven quite successful for them in the past.

Linton added this statement:

There is nothing in the proposed Modern Taximeter System regulations that would require Uber or any other digital reservation system to shut down. As a matter of fact, no other digital reservation service providers have indicated any plans to cease operations. The regulations have been designed to prevent potential credit card fraud. All data transmitted is done anonymously without identifying anyone. It is patently false that fuel efficient vehicles would not meet the sedan class regulations. As examples both the Camry Hybrid and Avalon Hybrid would comply with the standards. The provisions to be implemented are what Uber agreed to last year when the DC City Council passed the Taxicab Innovation Act. Without the regulatory protection the DC market would be open to unscrupulous operators who would be able to engage in widespread credit card fraud.  If Uber follows through on their threat to shut down it would be their decision and not the result of any regulation.

Also, I’ve obtained an e-mail sent Tuesday to Bouker, Uber’s lobbyist, from a city hall lawyer who acknowledged “there is merit to Uber’s concern” and expressed willingness on the part of Linton and other officials to work with the company to address them.

“We’re eager to continue conversations on this issue and reach a solution that works for everyone,” wrote Barry Kreiswirth, senior counsel to City Administrator Allen Lew. “As Ron has previously stated, he is prepared to call a special meeting of the Commission for May 24 in order to vote on the changes on an emergency basis, so the quicker we can get these issue resolved the better. … The District values the innovation Uber and companies like it have brought to District sedan and taxi service – and the great service it’s provided to District residents.”

Unclear how that degenerated into today’s accusation that the city is “burdening DC tech startups with anti-consumer, anti-innovation regulations.”

Mike DeBonis covers local politics and government for The Washington Post. He also writes a blog and a political analysis column that runs on Fridays.
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Mike DeBonis | May 17, 2013