Update: Towncar Service Uber Threatened By DC Legislation

By July 9, 2012

Image: Uber

Update: The amendment was shelved today at a breakfast meeting “in the wake of a rampant backlash,” according to DCist

Classy town car service Uber has became a darling of the startup world since its inception last year due to an appealing reservation system, slick marketing and a swift rollout across major cities. But now, the company seems to a target of legislation in DC that would jeopardize a planned fleet of lower-cost vehicles – a development that highlights potential tension between the savvy startup and traditional taxicab services.

The issue, said Travis Kalanick in an email to Uber users, is one of intervention to protect an established industry in the face of disruption.

“The [DC City] Council’s intention is to prevent Uber from being a viable alternative to taxis by enacting a price floor to set Uber’s minimum fare at today’s rates,” Kalanick wrote. “Consequently they are handicapping a reliable, high quality transportation alternative so that Uber cannot offer a high quality service at the best possible price.

Uber is mentioned by name only once in a draft of the bill that establishes a minimum sedan-class fee of five times the drop rate for taxicabs. The possibility of such a law, Kananick said, is the reason Uber chose not to introduce the lower-cost UberX service, which elsewhere will be comprised entirely of hybrid electric cars, in DC.

Kalanick called on Uber users to contact city council members in advance of the vote – which is scheduled for Tuesday, July 10 – listing members’ phone numbers and email addresses on the Uber blog. He also suggested that the taxi industry in the city has a close relationship with local pliticians.

“It was hard for us to believe that an elected body would choose to keep prices of a transportation service artificially high – but the goal is essentially to protect a taxi industry that has significant experience in influencing local politicians,” Kalanick wrote. “For obvious reasons, Uber is seriously concerned about punitive government intervention in a well functioning marketplace

It is not clear what fleet or operating model modifications Uber would need to make in order to fall under the auspices of law governing taxicabs. Uber’s current rate in the city stands at $7 plus $.75 per minute and $3.25 per mile.

Neither Uber nor the DC City Council chair could be reached by press time.

Image: Uber