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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Mon, 22 Dec 2014 15:38:35 -0500

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