You sort of had to see this coming.
It's only been about a month since San Francisco-based start-up Uber, the app-based luxury car service that lets you order a Town Car with the push of a smartphone button, expanded to a handful of additional cities (including Boston, Washington, and Paris; the service launched in New York last May, Seattle in August and Chicago in September), but it's already found itself in the crosshairs of the notoriously cranky taxi industry here in the District of Columbia. TBD's On Foot blog reports that the city's taxi commission chairman, Ron Linton, took several minutes out of a special hearing on proposed taxi fare increases this morning to accuse the company of operating illegally in the nation's capital:
One taxicab driver brought up the new service called Uber, the expensive upmarket cab service that positions itself as "everyone's private driver" and a tech-smart alternative to the District's taxis. Trips in D.C. cost riders $15 minimum and sometimes far more. Uber has received much national press and now offers service in several cities across the U.S. I wrote about its arrival in our city back on Dec. 15.
The cab driver was concerned about how Uber was operating and pointed out the starting mileage rate of more than $3.
But this morning, Linton just declared that the fancy new service, now in the District for under two months, is operating illegally. ...
"They’re operating illegally, and we plan to take steps against them," Linton told the driver in regards to Uber.
What's followed over the past several hours has been a parade of back-and-forth accusations between Uber and the D.C. Taxi Commission about the true nature of local statutes and whether the company properly sought out the advice of the commission before opening for business in Washington.
The crux of Linton's argument is that D.C. laws allow for the operation of either taxis, which operate on a time and distance basis and are required to have a taxi license, or limos, which do not need the same kind of licenses since they are booked in advance and charge based on a fixed pricing scheme. Uber, it would seem, may be operating in an ill-defined space in between: the service itself doesn't own any vehicles, it merely offers an opportunity to "book" an available town car electronically. But it also charges based on time and distance, not on a fixed rate basis, and there's some evidence that D.C. laws may actually prohibit that part of the deal.
This isn't the first time Uber has ruffled the feathers of a city's entrenched taxi industry. Back in 2010, the San Francisco Municipal Transportation Agency and the California Public Utilities Commission sent the company a cease-and-desist order that argued it was marketing itself as a taxi service without being properly permitted as such. Uber's reaction? They dropped the word "Cab" from the company name but ultimately stayed in business. As Matt Yglesias wrote recently in Slate, Uber's business model is more or less based on the fact that most cities have pretty strict laws governing which kind of vehicles can pick people up on the street and which can't. The Uber app provides a technology-based work around.
Uber CEO Travis Kalanick has spent the day orchestrating a mini media blitz to shore up D.C.-based support for the company and insists he has every intention of making sure he's complying with District law.
MORE: One thought on what else could be behind the D.C. taxi commission's Uber concerns: Washingtonian has a quick q&a with Kalanick that includes this intriguing exchange:
What have you learned about Washington, DC, since you opened here? Is it a typical market?
It’s not typical. It is a special place. We’ve never seen an adoption of our service so rapidly as in DC. We are less than a month in DC—we opened December 16—and we are where San Francisco was after nine months.