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The Uber sedan car service escaped the District's first attempt to regulate the Internet-based company when Council member Mary Cheh dropped a proposal to establish a minimum fare, among other provisions, but Uber's independence may not last.
Cheh plans to revive her proposal in the fall, and the chairman of the D.C. Taxicab Commission says Uber will not be allowed to operate unregulated in the city, especially after it introduces a cheaper, hybrid car service at an unknown date.
Commission Chairman Ron Linton says Uber is an "arrogant" company that "believes it should have total freedom from any government interest."
Uber is surging in popularity in D.C. because of the ease and comfort of its service. Customers use Uber's smartphone app and make payments digitally with a credit card. A receipt is emailed after they reach their destinations. The sedans are more comfortable and modern than many city taxicabs. They are also significantly more expensive, with fares climbing to $20 or more for short trips. But enough working professionals are willing to pay.
"When I'm taking Uber, I want to be in comfort or I want to know it will be there when the bars are closing, says Tim Shea, 25, a project manager at George Washington University, who says he uses the car service frequently despite its high price. "They are in a completely different class of vehicle, in my opinion."
Council member Cheh's proposal attempted to establish a sedan classification under which Uber would be regulated with a minimum $15 fare and a requirement to provide an estimated total fare before a transaction is completed, she says. Uber did not return multiple emails seeking comment.
"I thought we were all on board," says Cheh. "It would have given Uber its legality, which was crucially important."
Both she and Chairman Linton insist they are attempting to protect consumers, not only the city's regulated taxicab industry."
"It is not necessarily the fare that has to be regulated," Linton says. "What has to be regulated is the protection of all the parties involved. There has to be recourse to resolve disagreements."
Uber is currently relieved of any liability between the driver and the passenger under the contract it signs with drivers, Linton says.
"We find that it is in the best interest of all the parties if the driver is licensed and knows all the rules he or she has to adhere to," he says.
Customers have complained to the Taxicab Commission about exorbitant fares after receiving receipts showing they were charged significantly more than they thought they agreed to pay. The confusion over fares stems from Uber's use of market-demand, or surge, pricing and hand-held meters. The commission was unable to pursue the complaints because Uber was unregulated.
But Shea says the company has improved its system of notifying customers when fares may double or triple during peak demand.
"When Uber is in surge pricing there is a little logo in the corner that says 'surge' and when you click 'request a car' a big screen pops up to notify of the higher fare," Shea says. "It will show a chart that says if the normal fare is $18, it will be $36."
Uber's flexible pricing policy is considered by regulators unfair to the city's taxicab industry, whose fleet charges a set minimum fare plus mileage and time measured by dashboard meters.
"That's why I want to hold a hearing," says Cheh. "What demarcates taxis from the Uber service? Then we shouldn't regulate the taxis, either, and let that be a free-for-all."
While the controversy over Uber's sedan service festers until the D.C. Council returns from recess this fall, Uber is preparing to launch a new product that promises to invite another confrontation with regulators: an inexpensive hybrid car service. The service has started in San Francisco and New York.
It's unclear if an opening for such service will be available. Chairman Linton is not granting additional taxicab licenses, and he vows that Uber will not be able to become a "predator" by running unregulated hybrid vehicles in the city that charge very low fares to undermine the city's regulated taxicab fleet. "This is a public policy issue," he says. "The community has to decide through its elected representatives if they want to allow a business operation that can change its prices any time it wants to, and you never know what you are going to pay." As far as Tim Shea is concerned, the marketplace is working and Uber should be left alone. The more competition with city cabs, the better. "Let Uber bring in the hybrids, and I think you would see very quickly taxicab drivers learning to provide what people want," he says.