DC Taxi Commission Proposes New Rules to Shut Down Uber

http://blog.uber.com/2012/09/20/here-we-go-again-dc-taxi-commission-proposes-new-rules-to-shut-down-uber/

by japhyr • 14 years ago

176 170 14 years ago

blog.uber.com

sudonim3• 14 years ago

As a business strategy, this kind of brinkmanship wouldn't make me sleep well at night.

Basically Uber goes into a city, hires drivers, outfits them with equipment and starts operations. And for what it's worth, the service is awesome.

By the time the city & existing cab and livery drivers notice and want to do something about it, they've look like the bad guys, are anti-competetive and they've turned the public against them.

It's clever, but I can't help but think they'll end up with a situation soon that doesn't end up working out in their favor.

jmvoodoo2• 14 years ago

Isn't that what a disruptive business is all about? You can't replace an old business model with entrenched interests by asking "please" as far as I know...

_delirium• 14 years ago

Part of the problem is that the "disruptive" businesses (by design) often don't spend time thinking about or solving the difficult problems in an area, especially by coming up with working solutions to the problems that caused people to call for regulation in the first place. Many regulations can probably be replaced with something better, but they were often initiated by real problems, and it's important to understand what those problems were, and figure out how to avoid them or sidestep them. Many "disruptive" businesses don't have the historical knowledge or skills to do so, and are hoping they can just close their eyes and ignore the problems, which tends to lead to short-term success, but medium-term reoccurrence of similar problems.

You can see that with AirBnB, which I think is based on a good idea, but also utterly fails to deal with many of the actually hard problems in the space—those that involve things other than operating a website. Real-world problems led to hotels being regulated in the first place, such as health/safety and noise problems, and so far AirBnB hasn't done much to convince me that they even understand the problems in that space, let alone how to address them.

mathgladiator5• 14 years ago

> As a business strategy, this kind of brinkmanship wouldn't make me sleep well at night.

Isn't this what we want thou? Why ask for permission when asking for forgiveness is so much better?

As long as the offering is neither unsafe and done with customer obsession in mind, it should be a win.

mattmanser• 14 years ago

It's forced deregulation by circumventing the rules.

One interesting argument is that deregulation increases the supply of drivers hence making them inefficient. As they are inefficient the prices increase. Interesting POV.

However given that the American Medallion system doesn't seem to be working, there aren't enough drivers and a medallion is worth so much, screw that theory.

http://www.bloomberg.com/news/2011-08-31/ny-cab-medallions-w...

http://en.wikipedia.org/wiki/Taxicab#Regulation

Uber have hit a nice niche in America where they're taking advantage of over regulation. And the really odd thing is the cities saying Uber is A-OK, they're just idiots. They should deregulate instead of making a special Uber clause, it's bad government. But that's the way it works I guess, the ludicrousness of local politics around the world always makes me sad.

Note that their success isn't really anything about customer obsession, the only reason for their success is because of regulation. You wonder whether that's a happy accident or the entire private car thing is a cover and they're deviously cunning. All respect either way.

Speaking from a country without these sort of onerous regulation where a taxi is a trivial and cheap thing to get in minutes, any city getting rid of the medallions will put uber out of business practically over night.

The problem they'll face is that as grow they will probably put themselves out of business by encouraging mass deregulation, and then they'll be expensive with no value add. Their customer base will dwindle as new customers won't want to pay the premium for a chauffeured car and that'll be the end of it. Probably a good 5-10 years away yet though.

alecdibble3• 14 years ago

So Uber should pass out flyers to all competitors before it moves into a town?

As long as good ethics are used, it is called business competition and is generally a good thing. Do you think Uber is doing anything unethical? From the parent link, it appears not, and some of the rules Uber pointed out seem arbitrary and downright anti-competitive.

What really pisses me off is when people try and use legislation as a competitive advantage. That is unethical and it does make them look like your description: "By the time the city & existing cab and livery drivers notice and want to do something about it, they've look like the bad guys, are anti-competetive and they've turned the public against them."

sudonim3• 14 years ago

No, I think you're missing my point.

Uber is doing this expecting the cities and existing players to get pissed off and try to stop them. And then they publicize the anti-competetive nature of it.

That's their strategy. Get local news to write about how the city & cabbies are trying to shut them down. It's great marketing.

And it benefits Uber not to talk to local government prior to launching as long as they follow the letter of the law.

This is a genius strategy. But if I were the CEO, it would cause me stress that all of my drivers in a given city might be forced to not work indefinitely because I'm not getting the OK first. Maybe that won't happen.

SatvikBeri• 14 years ago

I might understand if the Taxi drivers were fighting back using better business practices-cheaper prices, better marketing, actually being able to guarantee taxis, an iphone app of their own, etc.

In some places, such as Manhattan, taxis actually are better than Uber. Because the traffic in Manhattan is so high that it usually takes less time to hail a taxi than to wait for your Uber to arrive.

But in DC they're not. They're fighting back purely by trying to pass legislation to prevent better companies from offering a superior service. In those cases, the old, unreliable, inconvenient taxi industry 100% deserves to fall.

eli9• 14 years ago

Taxi Magic lets you request a licensed cab from an app. But licensed cabs aren't allowed to charge cheaper prices.

netfire• 14 years ago

It's not the fact that they are competing with Uber, it's how. If your way of dealing with a competing business is to pass laws that shut that business down to preserve a monopolistic system, instead of competing on price and quality of service, you are going to "look like the bad guys" no matter what. How would what the city and taxi drivers are doing look any better if they had done it a year ago? How could they have competed in a more reasonable way if they have started sooner?

kmfrk3• 14 years ago

It's sad that in order to stay in business, start-ups might have to instate a position as CPO: Chief Political Officer.

ChuckMcM• 14 years ago

Well if you are disrupting old established markets then they will have already coated themselves with political armor, that the livery business goes back several centuries its not surprising that this is so. That said, it would behoove more companies that are attacking such markets (music distribution, and publishing come to mind) have a person who does exactly this, they look at public policy and the way it is being manipulated by the 'competition' and work to counteract that manipulation. John Gage at Sun had the title Chief Science Officer but his day to day duties involved understanding government processes, political movers and shakers, and how those processes worked for, against, or neutral with respect to Sun's goals. He was instrumental in getting me access to the NSA when we wanted to ship strong encryption in an interpreted language.

kmfrk3• 14 years ago

I wonder if the necessary consequence of this is to get involved with lobbyists. Not necessarily to lobby, just to pay them for an understanding of how the local politics work.

This would also be a big bonus to YC, if they managed to provide domain knowledge in this respect. Because what the hell are you supposed to do in a situation like that as a fledgling start-up?

eli9• 14 years ago

Well, when you're doing things that violate the spirit of the law (if not the letter), I think it's probably wise to invest in some lawyers and lobbyists.

mh-• 14 years ago

That's already an industry, if you weren't aware..

https://www.google.com/search?q=government+relations+firm

uvdiv5• 14 years ago

It's like a criminal racket, except it's the city doing it.

uvdiv5• 14 years ago

Some scenes from the inside:

http://www.washingtonpost.com/local/crime/dc-taxi-official-t...

I like the imagery of the murderous taxi kingpin driving a gold-painted Mercedes. (page 3)

ktizo6• 14 years ago

Reminds me of the gang theory of politics, that the definition of the government is whoever are the current most dominant gangsters. I find this is not necessarily a good general model, but for certain specific circumstances it can be pretty accurate.

robomartin12• 14 years ago

As a Libertarian I find this downright revolting. Unions and government working together against progress and free market forces. It does nothing to improve quality of service or to allow competition to lower costs. It is simply repugnant. When will people realize that unions --and those in government who favor and feed them-- are helping destroy this country from the inside out?

adestefan3• 14 years ago

You had me until you solely ripped on unions. If there was one or two taxi companies they would be doing the exact same thing.

uvdiv5• 14 years ago

It's union politics which gets their legislation passed. No one would support price-raising taxi cartels if the question weren't coated with rhetoric about wages and welfare.

Let a taxi union explain it:

http://www.nytwa.org/campaigns/stopillegalpickups

eli9• 14 years ago

The funny thing is that in this case, I'm pretty sure it IS one or two taxi corporations behind these rules. DC doesn't really have a taxi union.

chrischen2• 14 years ago

And to think what motivates them to try so hard to do this is purely because of their self-interest.

CamperBob22• 14 years ago

Yes, when your business is gated by a staggeringly powerful and wholly unaccountable entity, it's in your self-interest to get on their good side, regardless of the underlying ethics involved. Ric Romero has more at 11.

alecdibble3• 14 years ago

And you don't think corporations themselves lobby government entities? It is a little silly to generalize this down to unions. The problem is government influence, not who did the influencing.

kiba2• 14 years ago

Everyone is forced to lobby to ensure their interests are represented.

ktizo6• 14 years ago

In libertarianism, presumably labour unions are free to flourish and do what they like as organisations in a market free of government intervention.

Remember also that the history of labour unions predates their acceptance by government by a long margin. Trying to banish them or remove government support, or even as Adam Smith noted, making forming one a crime punishable by execution, does not seem to have stopped the formation of unions throughout history. So I don't think their existence is down to government, except in the reactive sense.

chrischen2• 14 years ago

But isn't this what libertarians truly are opposed to: http://en.wikipedia.org/wiki/Right-to-work_law?

eli9• 14 years ago

Huh? This has nothing to do with unions. DC does not have a particularly strong or notable union in the taxi industry. The lobbyists fighting Uber are almost certainly paid for directly by the small number of large cab corporations operating in DC--not a labor union.

I guess we can debate the merits of unions, but it has nothing to do with the fight over Uber in DC. The guy mentioned elsewhere in these comments who was arrested for trying to outright bribe the taxi commission? He wasn't a union boss, he was trying to buy favors for his own business.

kmfrk3• 14 years ago

It was a stump soap box speech. :P

confluence5• 14 years ago

As a liberal I find libertarians downright revolting. When will these society supported and overwhelming rich (or "going to be rich") technical males realise that the government created the industries they worked in through decades long investment where the free market failed to do so. When will they realize that their entire philosophy centers around a sociopathic psychological bias (http://en.m.wikipedia.org/wiki/Just-world_hypothesis) and should essentially be known as a little more than a psychological disorder? When will they understand that free markets are not natural phenomena but the artificial creation of governments for the benefit of society and subject to the corrupting influences of market participants which turn most free markets into cartels without the pressure of regulation holding it back?

mathgladiator5• 14 years ago

I find taxis revolting. The ones I've been are in unprofessional, unclean, and noisy.

Uber costs more, and people are using it. This meas that the service provided by the current taxi system is inadequate.

How would you propose that the quality that Uber provides come into existence without some kind of disruption/free-market/'rule-breakers'?

jlgreco8• 14 years ago

To bring the discussion back to the actual topic, how do you apply those thoughts to the situation at hand?

What are your thoughts on this particular case? I'm not really interested in what you think about libertarians in general. (Frankly I think the libertarian angle here is misplaced, though I still find attempts to slow Uber's growth to be very unfortunate)

kiba2• 14 years ago

Whoa, you should at least steelman libertarian beliefs before you assault a strawman position.

Anyway, government is also responsible for creating cartels and monopolies, some of which lot of people justify. For example, patents should be granted to people for the purpose of encouraging innovation. However, it's more like granting a legal weapon to beat competitors into submission. The AT&T for example, wages war against the telephone independents using their patents.

How do you prevent governments from simply becoming the lackeys of rent-seeking corporations? I had no fricking clues. Those libertarians seem to think elimination is the answer.

robomartin12• 14 years ago

That's sad brother. I don't find you revolting. Perhaps we disagree. But, revolting? That's a reach.

I happen to think that your view that "When will <snip> technical males realise that the government created the industries they worked in through decades long investment where the free market failed to do so." is flawed in a million different ways.

Virtually nothing government does is done well, efficiently and with true far-reaching vision towards future goals that will benefit all.

In most cases it the results are nowhere near what government expected.

The "invention" of the Internet is one such examples. While the genesis is solidly found in ARPANET not one person in government PLANNED for what we have today. Natural market evolutionary forces made this happen. Lots of entrepreneurs and investors throwing money, blood, sweat and tears into the pot and here we are. If it were up to government we'd still be trying to figure out how to raise taxes to pay for some ridiculous solution that nobody would want. Fortunes were made and lost giving the Internet life. Government couldn't even approach the people and financial investment that went into actually making it. Look at examples like Webvan to see the risks people took back then. Eight hundred million dollars pissed away chasing an idea. Yes, it was a failure, but that's EXACTLY what the free market is about. Some win. Some loose. And we all benefit from those who try.

How about jumping into bullshit wars? How is that working for you? You certainly can't pin that one on private enterprise, can you?

Nah, what needs to realized here is that we are an incredibly capable species that thrives by being challenged. We develop solutions by cooperating towards common goals and, yes, when there are benefits to be had (financial, intellectual, emotional, altruistic, etc.).

Government, at least in the US, has degenerated into a do-whatever-it-takes-to-get-votes organism. All parties. All ideologies. They all want votes to stay in power 'cause it's a sweet ride. That's all they care about. Not you, I or our kids. Nothing else matters. The sooner we realize that and start to figure out how to fix it the better off we will be. Interference with private enterprise is just one side-effect of how these governments are failing us.

I don't really like political labels that much because they don't really represent the person. I tend to use "libertarian" because, well, the other have nearly never represented me. One side is overly religious and the other side can be reminiscent of populist South American dictators that rile-up the masses, give them shit and buy votes. None of it good. I prefer to believe in the individual, the power of self determination and the drive to succeed. I could be wrong, but I think this is far better than some organization telling a startup that they can't disrupt the cab industry because, well, THEY don't want it disrupted.

It's like asking buggy-whip workers if their industry should go out of business in order to allow automobiles to happen. Of course they'll say "no", and the politicians and unions that might represent them would have raise hell to protect them. In the end, protecting that industry would have been a huge mistake.

Roybatty2• 14 years ago

Stalin, Mao, Pol Pot, Castro, you and others. You're sick in the head and immoral. Anybody that believes in freedom hates you.

smutticus• 14 years ago

As someone who likes to develop nuanced views of issues outside of simpel labels like 'libertarian' or 'liberal' I find both of you revolting.

Seriously, just say what you think. There is no need to identify your party affiliation before making a comment. It just decreases the likelyhood that I will positively associate with that label.

jswinghammer5• 14 years ago

So people like Bastiat, Menger, Mises, and Rothbard all have the same sociopathic bias that made them write encouraging peace, trade, and cooperation for mutual benefit?

11235813217• 14 years ago

Please speak carefully. You called an entire set of people revolting, but the person who you called revolting only said a specific practice was revolting. There is a big difference between disliking something a person does and disliking a person intrinsically, or worse, a large group of people. I hope you didn't mean it but of you did it is a bigoted thing to say.

joelrunyon• 14 years ago

I thought HN people knew better than to verbally attack large groups of individuals on a whim.

While your world views may differ, referring to "those people" as revolting doesn't help further any type of discussion.

kika• 14 years ago

> through decades long investment where the free market failed to do so.

What free marked failed to do? Create a taxi service? Gimme a break. Literally, if govt created a Manhattan project or Apollo doesn't automatically mean that they have to regulate everything else, including taxis and color of water in my toilet.

Man, I know what I'm talking about - I've lived for 40 years in the country which was built exactly as you want it to: government regulates _absolutely_ everything. This country used to be one of the superpowers of the world, and then it disappeared. It didn't lose in the war, nobody occupied it, it just broke down under its own weight. One day it just ceased to exist.

msbarnett• 14 years ago

DC taxi driver aren't unionized.

But don't let the facts get in the way of your uninformed rant.

dmix4• 14 years ago

Some sources, the only organization for DC taxi drivers is the DC Professional Taxi Driver Association [1] which acts as somewhat of a lobbying group.

Licensing is handled by District of Columbia Taxicab Commission [2].

[1] http://www.dcptda.org/ [2] http://dctaxi.dc.gov/dctaxi/site/default.asp

rayiner• 14 years ago

There are legitimate reasons for the taxi regulations and the taxi monopoly.

Why does every article about some regulatory body/union overstepping have to turn into a platform for some aspie libertarian rant about regulation/unions in general?

This is why we can't have nice things. In Europe, people can complain about one bad union or one bad regulation without people turning it into a screed about unions or regulations in general.

jowiar2• 14 years ago

The issue with Taxis, in particular, is that they need to be regulated in some way. When hiring a taxi consists of standing on the curb with arm extended, while someone ducks out of traffic to pick you up, there is very little negotiation that can be done. It makes sense that, within a city, the economics of a taxi transaction be defined in advance.

That said, I fully believe Uber should be allow to do its thing. A transaction initiated by Smartphone App allows the passenger sufficient ability to consent to whatever deviation from "standard" terms the driver may provide.

molmalo• 14 years ago

And this is what Google will have to fight when they finally get ready to offer a driverless-taxi service.

AustinLin• 14 years ago

As long as Uber is proving a useful service in a lawful manner, not ripping people off, the the city should let the consumers decide whether they should stay in business.

If they are such a threat to the DC cab industry the cab companies would do well to adopt some of the techniques that are making Uber so successful.

adestefan3• 14 years ago

The problem is that the DC cab industry was so corrupt that they ended up heavily regulated. Now those regulations do not allow them to do things that Uber does. The fix isn't to outlaw Uber, but to allow the taxis to compete in the same way.

ghshephard4• 14 years ago

Non-driver here, so I use taxis and private car services almost exclusively in northern California (My many thousands of trips over 10 years have probably moved from the class of "anecdote" into "data").

I've used Uber a couple times. It's pricey ($49 for a $33 taxi trip) but fantastic for those who can afford it.

Uber is better than taxi's in many ways:

o Taxi will frequently not take a trip if it doesn't like where it's coming from ("Bad neighborhood") - Uber doesn't tell the driver where you are until they accept the trip.

o Taxi will ask where you are going, and decline the trip if they don't like how much they'll make. Uber driver asks you where you are going, after you are in the vehicle.

o Taxi will sometimes take a trip, while they already have one - resulting in 30-45 minutes extra delay - hard to do with Uber when you can see where they are traveling.

o Taxi on the peninsula is usually 30-45 minute wait. Uber is < 15 minutes on average

o Drivers in Taxi's can be somewhat "eccentric" on the peninsula (As in, some of them scare me, they are so crazy). Uber Drivers are professional, rated.

o Vehicles in Taxi's are pretty craptastic sometimes. I've had to have the driver open my door (god forbid we get in an accident) - ubers vehicles professional Sedans.

o Airport Drivers will sometimes try and scam you for a 50% surcharge when they are still "in zone". They even try and pull that on someone like me who flys in and out of SFO on a monthly basis - I can imagine how many just accept it. Uber charges are identified before you book your trip.

o Lots of taxis will not take credit cards, or (try to) charge you a 10% surcharge - some of them would even RETURN to SFO when they discover you don't have cash. Uber is 100% electronic. No cash/credit card required, just your Smart Phone.

I love the electronic receipts, rating on the driver, certainty about when the vehicle is arriving.

On the peninsula, you pay about a 50% premium (or more, depending on demand), which is represented in the much higher quality trip you get.

I think if Uber was prepared to stick with that "premium" market, then the commissions wouldn't have a problem with them. Their concern is that, much like AirBNB was a trojan horse to get into the Renting Apartments/compete with hotels market, Uber is going to start competing with regular taxis - and for someone who has paid > $1mm for a medallion (http://blogs.reuters.com/felix-salmon/2011/10/21/why-taxi-me...) they are going to demand some sort of recompense and/or action be taken.

My guess is that there will be a strong correlation between cost of medallions and the resistance to Uber in any particular market.

What I would love to see, is that TAXI services adopt the uber model of source blind/closest taxi gets the trip/rate your driver/GPS location of Taxi/electronic receipts. It would be good for the industry, good for the customers, and good for the reputable drivers/services.

The only ones who would lose out would be the crappy services, with poorly maintained vehicles, and lousy drivers .

eli9• 14 years ago

As an aside, many of these things you describe licensed cabs doing (refusing to pick people up or drop them off certain locations) is illegal in DC. Perhaps the Taxi Commission would be better off enforcing the rules against its own cabs than trying to keep out competitors.

jlgreco8• 14 years ago

While those things are rightfully illegal, they are nevertheless a lot more prevalent than most people are comfortable recognizing. Any service which takes pains to eliminate the possibility of discrimination, not merely forbid it, is a welcome addition to the industry as far as I am concerned.

bmeckel• 14 years ago

This is great run down of uber. Here in NYC, where cabs are much more common-place I still use uber from time to time. The thing is it's not meant to replace taxis, it's more of a luxury item than anything. When I can't find a cab or just would feel better hopping in a nicer car, I'll use uber to get somewhere. Not to mention that the drivers are more than happy to wait while I run in to a store to grab some beer or whatnot, whereas a cabby would never be ok with that. I'm very happy that they've been licensed in NYC, as it means they will be around for a while.

zobzu3• 14 years ago

Already had a taxi assuring me the trip from the airport to my place was well under $20, as I had only a $20 bill and no active credit card. I asked him before hand if he was absolutely sure and that I wouldn't be able to pay more. I had 30Kg of luggage so I figured it was a good idea.

When we reached $20 at 70% of the way, he said "so ill bring you to the nearest ATM and you'll pay the diff ok?". I said no. He opened the door. I walked home. With my 30Kg. Yay.

I'd certainly take a non-taxi company whenever I wanna be sure. Sorry for honest taxi drivers.

Dylan16807• 14 years ago

Did you give him the $20? He certainly tried to defraud you.

ghshephard4• 14 years ago

That's one I've never heard of before. Taxi drivers have a lot of flaws, but they are pre-programmed to take you to a safe-destination. Also - I do a lot of fare negotiation on longer trips (I rarely, if ever, pay meter from anywhere but the airport), and, in 10 years, I've never had a driver back out on a deal.

In particular, on a long fare, say, San Francisco to Mountain View, if it's a slow time with light traffic (weekend afternoons) - I can usually get a $150 trip for $75, and never more than $100.

robomartin12• 14 years ago

Excellent post. Perfect example of why government should have nothing to do picking winners and losers as they are doing with Uber. They are trying to protect the mediocre at best. I used to think that the US was about excellence. That striving to be the best at something was actually rewarded. This is one example of how government can interfere to the benefit of the incompetent rather than promoting progress.

31436• 14 years ago

How is promoting the Uber model better for drivers, if it forces them to pick up customers that are located in places they would rather not drive to and forces them to destinations they would rather not drive to?

ghshephard4• 14 years ago

As an aggregate model, it would make taxis much more attractive for a lot of people who don't like the uncertainty, smelly cars, crazy drivers, poorly maintained vehicles, and long waiting times. Those people would be much more likely to hire taxis, increasing the business liquidity, reducing the uncertainty for taxi drivers in the business who might go a few hours without a ride. The advantage to drivers, is that an uber customer is identified before they get into the vehicle. They also have the means to pay. The ability to discriminate on source/destination is removed, but, in many taxi regions, they aren't, in theory, allowed to do that anyways.

I'm not arguing that 100% of all the uber rules are an advantage for drivers - in particular, the ability to turn down a $30 cab fare in order to wait for the $70 SFO trip will be to their economic disadvantage, but it will result in a healthier business overall.

jowiar2• 14 years ago

People are willing to pay a higher fare for the service?

azarias• 14 years ago

I know about the DC taxi commission a little bit...they will go anywhere, and do anything to protect their bottom line.

eli9• 14 years ago

The bottom line of the commission? Aren't they a government agency?

dmix4• 14 years ago

Taxi commissions make a significant amount of money from Taxi medallions. They can cost anywhere from $200k-$1 million dollars each in some cities.

jvm• 14 years ago

In NYC the taxi commission is in the pocket of the medaillion holders. That's why the recent law to issue more mediallions (2,000 at ~800k each = $1.6b for the city) had to go through the state instead (Albany being less corrupt than anything is mind-boggling), until of course a judge knocked down the law and said only the city could do so.

tylermenezes• 14 years ago

pg on Twitter several months ago: "Uber is so obviously a good thing that you can measure how corrupt cities are by how hard they try to suppress it."

EricDeb2• 14 years ago

I'm all for more efficiency, but can these companies who add more efficiency to the economy really suggest they are "creating 1000s of jobs." By definition, if you are making an industry more efficient aren't you taking away people's jobs?

redm• 14 years ago

Taxi drivers are heavily regulated already, including rates, posted information, what they can and can’t do and in at least one case how they can bill/accept money. In Boston a taxi driver told me the city mandates they use a city provided credit card method that charges them 8% and holds the money for week.

I'm not for regulation but anyone who's ever been scammed by a driver will appreciate it.

If all the taxi drivers have to live under these regulations, why would a 'private' taxi service be able to skirt them all? Uber should be held to the same standard and we should work on reforming the overall regulations to allow for more innovation for all.

DC Taxi Commission Proposes New Rules to Shut Down Uber

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