To regulate, or not to regulate — that was the question pondered Monday by the D.C. Council as it explored what, if anything, to do about the city’s rapidly changing vehicle-for-hire market.
A city in which travelers long had a simple choice between hailing a taxicab or arranging for a limousine has been shaken up in the past year, mainly by the success of Uber, a smartphone-based dispatch service that connects ride seekers with otherwise idle limousine drivers. While customers hail the company’s guarantee of a “classy, convenient ride,” the taxi industry and city official have responded with suspicion, if not outright ire toward a service that doesn’t fit neatly into existing city regulations.
“People are demanding quicker, better, cleaner, but more importantly, more reliable service,” said council member Muriel Bowser (D-Ward 4).
Much of the discussion at the hearing of the council’s transportation panel dealt with whether Uber and other innovative services should be subject to more rigorous city oversight.
In July, Uber was handed a six-month regulatory reprieve as city policymakers decide how to proceed. But last week, the D.C. Taxicab Commission moved to publish rules establishing a “sedan class” of vehicles for hire that would encompass the vehicles used by Uber, which doesn’t own cars but arranges rides and collects payments for their owners.
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 of them wheelchair-accessible; and require the vehicles to be painted black and meet age and model standards.
Also in the proposed rules is a ban on “demand pricing” — a direct shot at a key part of the Uber business model, which hikes prices during periods of high demand to guarantee a supply of cars.
In testimony Monday, Uber chief executive Travis Kalanick criticized the proposed requirements, characterizing them as an attempt to end his business and saying they range “from the draconian to the inane.”
“I would ask the D.C. Council to figure out what problem it is trying to solve,” he said. “Sedans didn’t all of a sudden grow horns and get a pitchfork.”
Kalanick, who said that Uber is affiliated with hundreds of area drivers, was questioned sharply by Jim Graham (D-Ward 1) who cited the “deleterious effect” that Uber’s success has had on taxi drivers.
“Those drivers become drivers on Uber, and they make a better living,” Kalanick retorted, adding that his best drivers can gross as much as $3,000 a week.
But Graham and a few taxi industry representatives lamented that the city was giving Uber and its affiliate drivers a regulatory pass — several Uber-affiliated drivers testified Monday that they were registered in Virginia, not the District — while taxi drivers have been subject to increasingly rigorous oversight.
“Diamond does understand competition is the American way,” said Philip Lebet, a Diamond Cab dispatcher, noting that his company and others operate under relatively onerous regulations, ranging from mandatory fare schedules to insurance requirements and routine car inspections. “But if they want to compete, let them compete in the same environment.”
The council also heard from another app-based dispatch service, Hailo, which works with taxicabs rather than limousines and plans to debut in the city in the coming months. Hailo has encountered less regulatory resistance, chief executive Jay Bregman said, because of “inclusive planning” with city officials.
Taxicab Commission Chairman Ron M. Linton said Kalanick is being alarmist about the proposed sedan regulations. “There’s no interest here in saying Uber can’t function in the District of Columbia,” he said. “In fact, we’re trying to do it so any number of companies can organize and operate in the market.”
Before the commission’s proposed rules take effect, they will have to be published, undergo a hearing and a 30-day comment period, then perhaps be revised, published and commented on anew. But the council will likely have great influence on how the regulations proceed.
Mary M. Cheh (D-Ward 3), who chairs the transportation panel, told Kalanick to breathe easy: “I don’t think there’s going to be an obstacle to the full flourishing of these services.”