During a speech today in Washington, Julius Genachowski, The Chairman of the FCC, gave his support to the taxi start up, Uber.
There’s a debate right now in Washington about rules that could discourage the innovative on-demand car service company Uber. Not hard to guess which side I’m on — I’m on the side of innovation.
This is a bit of political placating, as Genachowski has been trashed by conservatives who disagree with the FCC’s regulation of ISPs and net neutrality. Still, the Chairman’s trite shout-out helps frame the discussion of Uber’s entrance into the DC cab market.
As the DCist explains the DC Council held a “daylong” and bizarre” hearing today formally debating the future of Uber and “public vehicles-for-hire.” Travis Kalanick, the CEO of the San Francisco based company, was one of 42 witness called to speak on the issue.
Where many in Washington view local taxis as unresponsive, filthy, expensive and all around shitty (you can tell I’m neutral, right?), Uber represents a luxury of convenience: a cab service you summon through a mobile app and pay for with the credit card stored on your profile. The service is known for its reliability, efficiency and fresh take on the outmoded taxi-cab.
The issue for City Council is that Uber falls outside of the traditional taxi-cab regulatory regime. Where cabbies in DC are bound by certain rules (providing handicapped accessible vehicles, metered fares, credit card machines) Uber is not yet bound by its own special class of regulations. Before December the Council needs to figure out how it will treat Uber.
The DC Taxicab Commission predictably sees Uber as an industry disrupting enemy. And because of that, the DCTC advocates onerous regulations including: stipulating that Uber drivers must have at least 20 cars in their fleet, charging customers a minimum service fee, and prohibiting pick ups and drop offs outside of the city proper (Arlington people, sorry, you’re screwed).
While Uber is exempt from these DCTC rules until December, some form of regulation will need to be implemented before then. Two key issues discussed at the hearing: establishing a minimum price floor and seeking clarification on Uber’s practice of “surge pricing.”
The minimum price floor, set at $15, seems to be a purely anti-competitive policy to protect traditional yellow cars. Uber’s Kalanick sees it that way, and he wants it lowered to $10. “Surge” or dynamic pricing is the practice of upping rates during high demand.
One of the DCTC’s proposed regulations would also outlaw an increase in sedan fares during periods of peak demand. For Uber, Kalanick said that’s a situation that happens many weekends and on holidays like New Year’s…
Once a minimum price floor is negotiated and a transparency is established for surge pricing, it seems that the DC Council will be more accommodating to Uber’s presence, rejecting the more stringent restrictions proposed by the Taxicab Commission.