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With Lower-Price Service, Uber Again Irks D.C. Regulators

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Uber has gone head to head with D.C. regulators since first arriving in D.C. in late 2011, and it's new service promises more regulatory battles.
WAMU/Chris Chester
Uber has gone head to head with D.C. regulators since first arriving in D.C. in late 2011, and it's new service promises more regulatory battles.

When it comes to the state of Washington’s taxicab industry, the people have spoken—and they have not been pleased. Polls have shown deep dissatisfaction with D.C.’s 6,500 cabs and widespread support for reforms including the acceptance of credit card payments, which is supposed to occur this summer.

In the meantime, the tech start-up Uber has filled the void by offering consumers dependable and luxurious rides along with a convenient payment system through its e-hail smartphone app. But as Uber has surged in popularity it has repeatedly clashed with regulators, its innovative approach to personal transportation forcing D.C. to implement a new “sedan class” of vehicles-for-hire to accommodate Uber’s pricier service.

Price has always differentiated Uber from regular, metered taxi cabs—until now. On August 8 Uber launched a new service in Washington, uberX, designed to compete with taxicabs by offering similar or cheaper fares—a $5 base fare and $2.50 per mile if the car travels over 11 mph—in fuel-efficient hybrid vehicles.

UberX doesn't comply with D.C. regulations

But there is another regulatory showdown forming already. The D.C. Taxicab Commission says the vehicles that customers are e-hailing through uberX do not comply with regulations for sedans. One again, the commission says Uber is operating outside the rules.

“If those vehicles were used for this service, that would be essentially having an unregulated vehicle running against a taxi that is regulated. It just simply doesn’t make any sense,” said Neville Waters, a spokesman for the D.C. Taxicab Commission.

The hybrid vehicles used by uberX drivers technically are not taxis because they do not have fare meters. Waters says the vehicles fail to meet the size requirements for sedans, too, so they are not eligible for the L Tag registration for limousines and sedans licensed in D.C.

“We’ve not had any conversation with Uber about what they intend to do and I frankly don’t know what they are trying to do,” Waters said. “I’ve never met anybody that represents the company. They have never engaged with the commission on any level for any conversations about what they propose to do in this market.”

Uber’s official sales pitch for uberX is “better than a taxi for the same price.” The traditional taxicab industry has noticed.

“Well, that's the first direct assault on the taxicab industry,” said Roy Spooner, the general manager of Yellow Cab Co., which owns about 100 cabs with another 400 using the Yellow Cab affiliation, in an interview with WAMU 88.5. “They are saying they are providing the same taxicab service without any regulation and they can run it at cheaper fares.”

In a letter to D.C. Taxicab Commission Chairman Ron Linton, Spooner said the advent of smartphone e-hailing services like Uber at the same time the traditional taxicab fleet is being mandated to modernize is causing a competitive disadvantage for his company.

“Now comes UberX, Sidecar and Lyft whose main goal as advertised is to provide better and cheaper service than a taxicab because they have no mandates, meters, back seat devices, dome lights, special color schemes price list as they claim they cannot be regulated because they only accept donations. More and more direct and open threats against the taxicab industry from lost cost providers while the taxicab rates increase to pay for Taxi Modernization,” the letter said.

Spooner fears the roughly 100 hybrid drivers at Yellow Cab will depart his company in favor of uberX to take advantage of the lower overhead costs.

Uber says they are only offering choice

As for Uber, the tech start-up says it is simply responding to consumers’ demands for better service—better than what traditional taxis can offer.

"This is simply about providing a lower cost, environmentally-conscious option for D.C. residents and visitors," said Rachel Holt, Uber D.C.-based general manager.

Holt says uberX vehicles are not operating in violation of sedan class regulations. “If you actually look at the definition of what a limo or sedan is, that’s actually not the case.”

The regulation for sedans states an L Tag “is a limo or sedan designed to carry fewer than 9 passengers excluding the driver with three or more doors, other than a taxi cab, a coach, or a wheelchair accessible van, and are not permitted to accept street hails from prospective passengers on the street.” Holt said the D.C. Taxicab Commission is restricted to regulate the safety of sedan drivers and passengers, not the actual size of their vehicles.

In Uber’s view, the District’s moratorium on new taxicab licenses has left prospective cab drivers with little choice but to seek other avenues to earn a living, and uberX offers that opportunity.


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