JACK EVANS REPORT: TAXICAB BILL’S UBER AMENDMENT KEEPS D.C. TECH-FRIENDLY


 

Last week, the Council received an unusual
amount of attention when it considered
how a pending bill regarding taxicab
modernization might impact a new car service
called “Uber.” Anyone who was not familiar
with Uber before the debate likely is by now, and
I personally received about 5,000 emails from
concerned residents who want to make sure they
can continue to enjoy this transportation option.

Though there were strong opposing views on
the underlying taxicab bill, it sought to address
issues of importance to anyone who has ever
ridden in a D.C. taxi and wished for a better
experience. For example, the bill would move us
toward credit/debit card readers in all taxicabs, a
passenger information monitor displaying a trip
map and other content, and a driver information
monitor with an electronic manifest and GPS
navigation. In other words, as in so many areas
of our government, the District is finally moving
toward meeting baseline expectations that even
much smaller jurisdictions have been requiring
for years.

So how does this impact Uber? Uber is
a technology company that connects licensed
sedan drivers with consumers who want a convenient,
high-quality transportation option, through
the use of a smartphone app. Apparently, Uber’s
pricing model, which uses both a time and distance
factor for calculating rates, has been viewed
by the taxicab commission as operating in a legal
gray area despite existing regulations seeming
to permit such a rate. It was my position that
Uber’s status should be clarified in order to make
the service explicitly legal, but I disagreed with
Councilmember Cheh’s approach, which would
have mandated a minimum price for Uber that is
a full 5 times that of a taxi.

Councilmember Cheh presented her goal as being to simply maintain
status quo by memorializing the pricing structure
currently in place, but her draft would have also
subjected many other aspects of the business,
such as advertising and types of vehicles offered,
to taxicab commission regulation. Uber asserted
that any price floor would be counterproductive,
preventing them from being able to provide
lower costs to consumers if possible within their
business model.

I agree. When Councilmember Cheh was confronted
by other Councilmembers about the significance of making
this type of change to the proposed law
without an additional public hearing,
she removed all Uber provisions from the
bill pending further discussion in the fall.

Unfortunately, unless another change was
made to the bill, Councilmember Cheh’s action
would have forced Uber not only to continue to
operate in this gray area, subject to unfair ticketing
by the taxicab commission, but also subjected
them to additional regulation contained
in the larger taxi bill being passed that day.

To fix this situation, I offered an amendment, with
the support of my colleagues Tommy Wells,
David Catania, and Michael Brown, to explicitly
authorize Uber’s operations while providing
reasonable safeguards to protect the public.
Specifically, my amendment requires that: (1)
an estimated fare is available to the user when
the application is used to book a sedan; (2) the
method for calculating the fare structure is provided
by the business to the user of the mobile
application prior to booking a sedan; (3) upon
completion of the trip, the customer is provided
a receipt that lists the pick-up point, drop-off
point, and total fare paid; and (4) the business
providing the mobile application uses sedans that
are licensed.

After extensive debate and minor tweaks, my
amendment was accepted by the full Council,
with the exception of Councilmember Graham.
This part of the law will sunset on December
31, 2012, however, at which time we will have
to either extend the law or move a new consensus
legislative solution for Uber.

Advocates for additional government regulation will say that
all transportation services need to be heavily
regulated, but I would point out that the service
offered by Uber is a far cry from the days when
any D.C. resident or tourist getting a ride
to the airport in a taxi could count on only one
thing – that they would be charged a different
fare than the last time they went, even
from the same location, with no articulated rationale.

Uber provides clear pricing details tied to time and GPS
tracking, as well as a receipt containing a map of
the actual route taken, and its future competitors
undoubtedly will provide that level of information
as well. Inefficient routes are scrutinized by
customer support staff and adjusted if necessary.

Any attempts to overcharge would quickly be
remedied as consumers voted with their feet by
choosing other companies, filing a class action
lawsuit, or simply filing a complaint with their
credit card company. Absent that, it is not much
more difficult to file a suit in small claims court
than to make a taxicab commission complaint,
and by all accounts the outcomes are fairer in
the former venue.

A better arena for regulation is to address
the real need of preventing discrimination by
drivers in passengers picked up or destinations
serviced–unfortunately for those who are
pro-taxi commission, this factor also counsels
against subjecting Uber’s full business to taxi
commission oversight. While I hear anecdotal
evidence of taxi drivers making discriminatory
decisions as to which potential riders to stop and
pick up, Uber cannot be “hailed” but is rather is
pre-arranged at a pickup location. And while taxi
drivers concentrate their services in the central
business district and popular evening entertainment
areas, Uber will service any location within
the District. As Councilmember Alexander said
on the dais, Uber will pick up passengers east of
the Anacostia River routinely, and their final destination
is already confirmed before the pickup is
made. With a taxi dispatch, despite rules to the
contrary, I hear stories of folks waiting for two
hours, never to be picked up. And as to safety, all
of Uber’s drivers are licensed as sedan or limo
drivers in D.C., Virginia, or Maryland, and drive
routes predetermined through an iPhone application
and logged in the company’s GPS tracker
– adding an additional layer of regulation would
be akin to making lawyers pass bar exams, and
then saying their law firms have to somehow
take the exam, too, rather than simply apply for
the appropriate type of business license.

In addition to looking at Uber, it is important
to study the full landscape of transportation
options, including taxis, and I am pleased that
Councilmember Cheh is planning an additional
hearing in the fall. If the argument for a more
regulated Uber is that it otherwise places taxicabs
at a competitive disadvantage, perhaps we
need to explore ways to improve the quality and
thus competitive position of our taxis. I understand
that Uber partners with taxi drivers in
Chicago to accomplish this very purpose, which
might be a positive development here as well.
As with the LivingSocial debate, I would rather
encourage technology companies to have a presence
in the District than create incentives for
them to leave. Please let Councilmember Cheh
and your other elected representatives know of
your support for Uber’s service, and the need to
allow a new business to create jobs and operate
without unnecessary government interference. ?

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