In this photo taken Tuesday, Dec. 16, 2014, a taxi on Market Street goes past the headquarters of Uber in San Francisco.
Now that Maryland has joined Virginia and D.C. in formally legalizing Uber and other app-based ride-hailing services, the entire Washington metropolitan region has welcomed the tech companies that pride themselves on disrupting the marketplace.
Our region has been arguably the most Uber-friendly in the nation. The company, whose popular ride-hailing platform UberX allows drivers to use their personal cars as cut-rate taxis, made Washington its seventh launch city in 2011 and has scored legislative wins in all three jurisdictions since.
In the meantime, Uber has had to fight difficult battles for acceptance in some of the more than 300 cities it is operating in across the country and in Europe — tougher than anything it faced in Washington, even when the head of the D.C. Taxicab Commission in 2012 threatened to shut the service down.
A climate ripe for ride-hailing apps
A number of factors lined up in Uber’s favor to make way for its ascendancy here: the District’s many competing taxi companies were unpopular; the region lacked powerful taxi unions or lobby; local legislators wanted to be seen as pro-innovation; large numbers of car-free residents with disposable income moved in; Uber quickly built a loyal customer base willing to defend it once regulators and lawmakers acted; local regulators lacked the enforcement mechanism to initiate the kinds of anti-Uber crackdowns happening in Europe.
“Uber has been incredibly successful gaining traction in this region and in some ways that could be because they were here so early,” said Adie Tomer, who researches the convergence of transportation and technology at the Brookings Institution.
“In D.C.'s case, many of the narratives that have started to shift public opinion came after the keys to the city were given,” Tomer said.
In Houston, city leaders have threatened to revoke Uber’s permit after a man who had served 14 years in prison on drug-related charges became an Uber driver and then allegedly sexually assaulted a female passenger. At issue, whether the company’s background checks are as effective as the background checks used by taxicab companies, who check an applicant’s fingerprints against the FBI database.
In Washington, Virginia, and Maryland, Uber (and its smaller competitors Lyft and Sidecar) convinced legislators to exempt it from having to use fingerprint background checks to vet potential drivers, although in Maryland regulators may revisit the issue in one year. Uber contends its own background check system is the best in the marketplace.
“We've had several individuals who've passed the fingerprint-based background checks who've actually failed our checks. Our checks require individuals to go down to courthouses and look at records first hand. So they are not taken from just databases,” said Zuhairah Washington, Uber’s D.C. general manager.
“Given that safety that is such a huge priority for us, it is something we have taken upon ourselves to revolutionize,” she said.
While the Uber app allows passengers to rate their drivers and see a photo, phone number, and license plate number of the person coming to pick them up, the company’s critics say its background checks are unsafe. Sooner or later, these critics argue, an incident will happen in the Washington region that will make local legislators revamp the new laws to include fingerprinting.
“They are welcome to compete but they have to do so safely. Unfortunately, we do believe now it is going to take some time, review, and probably some tragedies happening locally,” said Dave Sutton, a spokesman for Who’s Driving You, an anti-Uber public relations campaign funded by the taxicab industry.
No big negative publicity
Uber has benefited locally from a lack of negative publicity related to driver assaults or privacy concerns that continue to plague the company elsewhere, said the Brookings Institution’s Tomer.
“Chances are, until something happens, we are going to see the regulatory scheme we see today,” he said.
Uber also had a big advantage over the local cab lobby when it came time to legislate: money. As WAMU 88.5 reported, Uber spent more than $300,000 lobbying the D.C. Council in the weeks and months before a final bill was approved last fall. But focusing on Uber’s legislative wins may obscure a more important reason for ride-hailing’s local success: customers like it.
“One of the stories we've forgotten at this point is how much folks didn't like riding in cabs when they were on the zone fare system,” Tomer said. “That gave folks a bad taste for cabs and the cab lobby.” After D.C. taxis switched to a metered fare system, it took years for the majority of the fleet to accept credit card payments, an amenity that Uber featured from the start.
In Uber’s view, money and political access did not create its success; they are byproducts of it.
“For D.C. and Virginia in particular, we've been fortunate enough to align with leaders who see what is happening in the future. The District and the state of Virginia have been innovators nationally and on this issue it is the same,” said Washington, Uber’s D.C. general manager.
“It is really the voice of the people, the consumers, writing in and telling their elected officials how much this product means to them,” she added. Drivers are making money and setting their own schedules on the UberX platform, and passengers are taking advantage of Uber’s convenience, she said.
That may sound like public relations-speak, but Tomer agrees that Uber has carved out a loyal chunk of the personal transport market.
“The timing of when Uber goes in the markets matter so much. Once they build a customer base it is very difficult to tell that customer base you may be losing your service,” he said.
Landscape outside D.C. not as favorable
Outside Washington, Uber is facing much tougher fights. The Nevada senate voted down a bill to allow ride-hailing services in the state. Uber pulled out of San Antonio when the city passed strict background check rules. Uber also has suspended operations in Portland, Oregon; Tuscaloosa and Auburn in Alabama; and Panama City, Florida.
The backlash extends to other continents. Geneva banned Uber last week. Germany did the same last month. Dutch prosecutors have opened a criminal investigation into Uber after it was banned by a Dutch court. Uber suspended operations in Spain. Six cities in India and three in Australia have banned Uber.
“Where the regulatory question marks are — where the debates are happening between Uber and public agencies – is insurance, driver safety, and passenger safety,” Tomer said. “What is not being argued over and what gives Uber such power in the long run, is that the technology is an advancement.”