DC City Council Shelves “Uber Amendment” Against Discounted Private Cars, Road Looks Clearer For UberX

An explosive day of online and traditional campaigning appears to have worked. The Washington DC city council was set to approve an amendment to its far-reaching taxi legislation that would have set a floor price for private cars. But now councilwoman Mary Cheh, who had proposed the so-called “Uber Amendment,” says this morning that she is shelving it.

No, TechCrunch has not turned into a DC politics blog (you should check out the DCist for all the gritty local details on the story, actually). This is a big issue for Uber and a wide range of other private car startups.

The ruling would have required any private car company to charge at least five times the minimal price of a taxi. This would have specifically prevented Uber’s new discounted private car service, UberX, from legally operating in the city. While Uber’s original fleet is comprised of black sedans and other relatively expensive taxi alternatives, UberX runs on Priuses and other less expensive cars, and competes directly with taxis.

Cheh’s amendment openly stated that the point was to restrict competition, which led many (including myself) to question the motives.

DC government, and the DC taxi commission in particular, have been cited for a variety of ethical violations over the years, including concerns about the taxi lobby’s power over local offices. The commission itself went after Uber DC in January, after it launched, over dubious legal claims.

Cheh, a tenured Georgetown law professor, had until recently sided with Uber, saying that it was important that DC support startups like it. But the amendment — which Uber was only able to see late yesterday — went the other way. She followed up in an email to her colleagues last night stating that she had worked out an agreement with Uber.

Uber chief executive Travis Kalanick replied in a letter to the city council saying that there was no such agreement, and that the company has been consistently against pricing floors.

For now, the amendment appears likely to be removed entirely. So the road to DC is looking clearer for UberX (and any of the many other startups going up against it).

Both emails, below. For more, be sure to check out these thoughts from Uber investor and DC cab driver’s son Shervin Pishevar.

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Mary Cheh:

Dear Members and Staff,

I want to clarify a few things about Uber. Uber is a premium car service that offers transportation in upscale vehicles and charges based on time and distance, just like a taxi. Currently, Uber operates in what is, at best, a legal gray area. However, because Uber is providing a valuable, innovative service in the District, I want to allow Uber to operate legally here.

Several months ago, Uber contacted me and asked to work together to legalize services like Uber in the District. Since then, I have met with Uber many times, negotiated in good faith, and believed that I had reached an agreement with them last week.

The amendment that I am proposing tomorrow would allow services such as Uber to operate legally in the District. Companies like Uber would be exempt from regulation by the Taxicab Commission so long as they provide an estimated fare, disclose rates, provide a receipt, and use sedans licensed by the Commission to operate in the District. The amendment would maintain the status quo by requiring sedans to have a $15 minimum fare and time and distance rates that are higher than taxicabs (currently, Uber has a $15 minimum fare and rates that are higher than taxicabs, so my amendment will not change these figures. See:https://www.uber.com/cities/washington-dc ). After 1 year, the amendment would allow Uber or anyone else to petition the Commission to adjust these rates as necessary. Establishing a minimum fare is important to distinguish premium sedan service from traditional taxicab service and to prevent sedans from directly competing with or undercuting taxicabs. Taxi companies want minimum fares that are much higher than what I am proposing in my amendment. However, I believe that simply preserving the status quo is appropriate and reasonable.

I am deeply disappointed that Uber has decided that it no longer supports this amendment that we negotiated in good faith. The taxi industry is one that has been regulated for a very long time. If Uber wishes to operate taxis, then it is free to do so, but it should then be subject to the same regulations and requirements of taxis.

I would be happy to answer any questions that you may have.

Regards,
Mary

———–

Travis Kalanick:

Council members,

The high level on UberDC is that our customers in the District, in
shocking solidarity in email and social networks have made their
voices heard about the value and quality of the Uber transportation
alternative. Reliable service that’s prompt and doesn’t discriminate.
Convenience that makes getting around DC a breeze without cash
changing hands. Coverage that doesn’t leave you stranded late at
night. Our driver-partners provide this service because they take
pride in their work, and because they believe in making DC a great
place to live and to get around in. When the Council fixes Uber’s
prices, it stands against these basic benefits going to the average
constituent – that for some reason only the rich can get them.

So in addition to quality, we think that doing right by our DC
customers means high quality service at the best possible price. We
think that is a noble cause. It is because of this that we do not
understand how a price floor that sets our minimum price at 5 times
the taxi minimum is helpful. Why would you want to make a great
transportation option only accessible to the rich and well-heeled? Why
would you so clearly put a special interest ahead of the interests of
those who elected you? The district’s residents showed their severe
displeasure that their elected officials would consider such an
action. The nation’s eyes are watching to see what DC’s elected
officials stand for.

And how about the drivers? Uber has created hundreds of driver jobs in
the District. Those hundreds of jobs created since our launch last
December are on their way to being thousands of jobs. Jobs that the
District needs, and jobs that require high performance where drivers
do far better because of great prices driven by Uber’s logistics
technologies. Why protect one small business owner at the severe
expense of another? Our driver-partners talk about the Uber
opportunity in terms of their own American dreams. If you want to see
for yourself, take an Uber for a spin and ask them. Our regular riders
do all the time, and that’s part of where their passion comes from.

What many of you may not realize is that Uber is a tech company with
local offices bringing incredibly sophisticated technology to bare. In
an era where DC needs tech companies to locate themselves and grow in
the city, what kind of message does stifling competition send to the
technology community? A technology community armed with 100′s of
millions of twitter and Facebook followers who passionately believe in
consumer choice and are willing to wage a digital battle to be heard.

So here’s my ask. Take the ‘Minimum Fare’ language out of the
amendment. It’s that simple. Doing so shows the tech community in DC
that you support innovative, burgeoning technologies in the face of
special interests. It shows your constituents that you’ll put people
and progress above politics. I’m an idealist, it’s always been a
problem of mine and I do apologize in advance. It shows the taxi
industry that the Council expects them to step up their game honestly
without alternatives being relegated to only wealthy residents of Ward
3. In any case, I urge you to be bold, and do what’s right for your
constituents, who really do not understand why Uber can’t help them
get the best possible price for a transportation alternative they
love.