Updated 4 p.m. with details on competitor Klink
Two-and-a-half years after the D.C. government started its regulatory tango with Uber, the app-based car-hailing service, another tech upstart is running into similar troubles with the District.
Ultra, an Web-based alcohol delivery service, was ordered to cease and desist operations Thursday by the D.C. Alcohol Beverage Control Board for selling alcoholic beverages without a license.
Although Ultra partners with a licensed booze purveyor to fulfill orders of wine, beer and spirits and deliver them to D.C. households, the board found Ultra was “soliciting orders for sale” and processing customer payments, necessitating a license. The board’s reasoning was laid out in a March advisory opinion rendered for another start-up, BeerRightNow.com.
As of Thursday afternoon, Ultra had shut down its D.C. sales. Entering a District Zip code into Ultra’s home page generated this message: “Sorry, Ultra is not available for this zip.”
But if you’re expecting Ultra to follow Uber’s lead and stir its customers into a righteous frenzy against regulators in a bid to force them to change their regulations, think again.
Ultra owner Aniket Shah said Thursday he is committed to working with the ABC Board to finding a way to operate under the current rules. That may involve having his locally licensed partner, which he declined to name, process payments directly rather than having Ultra take customers’ money then pass it on to the partner.
“We are not defiant,” he said. “We are hoping to comply completely with all regulations, and we take these regulations very seriously. We want good relations with [the Alcoholic Beverage Regulation Administration] and the partner stores. We don’t want to risk the licenses of our partner stores, not only in D.C. but through the U.S.”
Shah said he’ll be meeting with regulators Friday to work though the issues, but he said Ultra will stop taking D.C. orders while the matter is resolved. He said Ultra had been doing “very well” in D.C. since launching in late May.
“D.C. is an important market for us,” Shah said, “so we will make our best effort to operate in D.C. one way or another.” But don’t expect any inflammatory blog posts or mass-e-mail campaigns to lawmakers — tactics used by Uber to force taxi regulators to back off.
“Ours is a completely different situation,” Shah continued. “We understand we are in a more controlled environment.”
In the meantime, D.C. residents who need booze at their door can contact any number of city liquor stores that offer local delivery — albeit without a slick website or a one-hour delivery guarantee — or try another outlet, Klink.
Jeff Nadel, Klink’s CEO, said Thursday he’s confident his business model passes regulatory muster. “We are not inserting ourselves in the transaction,” he said.
There’s also good news for Silver Spring residents: Ultra is still delivering there, but only beer and wine, no spirits.