Greater Greater Washington

Cheh would limit regulation for Uber and taxi apps

"Sedan" cars like the ones the popular car service Uber uses, and any electronic apps that help people book either sedans or traditional taxis, would gain protection from most regulation under a proposal by Councilmember Mary Cheh.


Photo by Dkmelo on Flickr.

Cheh (ward 3), the chair of the committee that oversees transportation, released the "committee print" of her bill to legalize services like Uber. The committee will mark up the bill on Friday.

The bill, now entitled the Public Vehicle-for-hire Innovation Amendment Act of 2012, has a new section explicitly exempting most "digital dispatch services" from regulation by the DC Taxicab Commission. DCTC can still impose some requirements on "digital dispatch services," like Uber, Taxi Magic, Taxi Radar, or Hailo, but only for certain purposes:

  • Geography: Dispatch services can only use vehicles licensed in DC, or non-DC vehicles for trips to or from those other jurisdictions (a regional body, WMATC, which is totally different from WMATA, regulates these interstate trips.) However, DCTC also has to start licensing new drivers and vehicles.
  • Equity: The services and drivers will have to serve all parts of DC, and otherwise not discriminate against any passengers.
  • Receipts: Riders have to get an electronic or paper receipt after the trip. But unlike with the DCTC's proposed regulations, the service can choose; Uber, which gives everyone an electronic receipt, won't have to also add printers to every vehicle. Other services could use paper instead if they wished.
  • Transparent fares: Services will have to clearly tell riders about their pricing system, and give riders an estimate of the fare when they book. Uber doesn't do this now, but CEO Travis Kalanick said at the recent hearing that they were working on adding it already.
Services will also have to give DCTC regular data dumps of where their various trips started and ended, their times, etc. but no personal information about the rider. This could let DCTC better understand demand patterns, and perhaps they can ultimately release data files publicly, like Capital Bikeshare has done.

The bill does ban one current Uber practice: drivers rating passengers. Uber's system lets passengers give drivers a rating after their trip, which helps future passengers choose among drivers, but it also lets drivers rate their passengers. Cheh is concerned this could help drivers discriminate among passengers who want to go to unpopular locations, because of their background, or for other such reasons.

As for sedans, DCTC can regulate them to ensure they are safe or to protect consumers from fraud, but its regulatory power is otherwise limited. DCTC can also collect the same trip data from sedans. (They will get that data from taxis as well through the new electronic meters that recent legislation required for all taxis.)

Taxi companies would be able to operate both sedans and cabs, and drivers could even get a single license letting them drive both types of cars, but the cars themselves would remain separate. All taxis will be one uniform color beginning next summer, while sedans will remain black and more luxurious.

This keeps a strict separation between taxis, which are one type of vehicle that look one way and charge fixed rates, and sedans, whose rates aren't regulated. It means taxi companies can't start competing on value and raise prices, but it makes it more likely that the current taxi market remains largely as is while enabling services like Uber.

It also hopefully keeps the DCTC from going overboard with silly requirements for sedan services or taxi dispatch apps. These apps and services represent the best chance to bring new innovations and better service to potential riders.

I've reached out to Uber for comment about whether they support the bill, but hadn't yet heard back. I'll update this post if they respond.

David Alpert is the Founder and Editor-in-Chief of Greater Greater Washington and Greater Greater Education. He worked as a Product Manager for Google for six years and has lived in the Boston, San Francisco, and New York metro areas in addition to Washington, DC. He loves the area which is, in many ways, greater than those others, and wants to see it become even greater. 

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Uber's system lets passengers give drivers a rating after their trip, which helps future passengers choose among drivers, but it also lets drivers rate their passengers. Cheh is concerned this could help drivers discriminate among passengers who want to go to unpopular locations, because of their background, or for other such reasons.

What a bunch of nonsense. As if passengers somehow never discriminate.

by Jasper on Nov 5, 2012 3:26 pm • linkreport

It is a mistake to not allow drivers to rate passengers. If the model is that this is somehow akin to a taxicab service, I could see that making sense, but if instead we envision a driver picking up a couple of passengers on his/her way to work, the driver should be able to learn of passengers who "don't ride well with others" so as to have some confidence in who he or she is picking up. Many drivers might not be willing to take passengers if they cannot have such an assurance. Other drivers wouldn't care as much, being more focused on the payments from passengers, so I don't envision new or not-great passengers never getting lifts; instead they would have a strong incentive to "behave well" (e.g., being polite, showering, not eating or making cell phone calls in the car, etc.) so that they will have the greatest number of options for lifts in the future.

by Allen Greenberg on Nov 5, 2012 3:28 pm • linkreport

I don't know how you could effectively ban informal rating of passengers anyway but,

on the whole these seem pretty good. Mainly because their aim is to protect the consumer rather than protect or punish a set of drivers.

by drumz on Nov 5, 2012 4:00 pm • linkreport

I've used Uber a few times and am a fan.

But I think it's ridiculous to allow drivers to rate passengers. I cringe at the idea of a "customer database" that allows drivers to pick and choose who they will or won't pick up..based on another drivers previous experiences. I don't think any company providing a service should be able to game the system in such a way

by HogWash on Nov 5, 2012 4:24 pm • linkreport

A large part of the popularity of Uber (and similar services) is due to the fact that DCTC is corrupt, ineffective and dedicated to serving the interests of the cab companies rather than their customers. This lack of effective regulation has resulted in DC having one of the worst taxi systems in the country and now the cabbies are looking to the DCTC to protect them from competition. Having used both DC taxis and Uber on multiple occasions I can say, without hesitation, that Uber provides vastly superior service and I see no reason why customers who are willing to pay Uber's higher prices to get that service should be prevented from doing so.

The reason taxis are heavily regulated, have fixed rates, etc is because someone hailing a cab on the street is not able to comparison shop or favor one company over another so it is reasonable to expect a comparable experience and the same pricing from any taxi. An individual using using an app is able to choose a company from among various options eliminating the need for taxi style regulation.

Instead of trying to protect the current cabbies from competition DCTC should focus on ensuring that DC taxis are safe, clean, reliable and modern and that their drivers are competent, knowledgeable and honest. I think that if DC cabs became the equals of those seen in NYC, Boston, Chicago or most other American cities this issue would become irrelevant as Uber would serve a market that was willing to pay for luxury sedans, uniformed drivers, etc while people who just wanted to get from point a to point b would opt for less expensive taxis.

by Jacob on Nov 5, 2012 4:28 pm • linkreport

Allen: This bill does not talk about "dynamic rideshare" services, which is what it sounds like you are discussing. If such services catch on, then it would make sense for drivers to rate passengers just as sellers can rate buyers in a number the of "collaborative consumption" services sprouting up lately.

Such services may run into their own regulatory quagmires. In other cities, some "vehicle for hire" regulatory bodies have said that dynamic ridesharing is a vehicle for hire service, and thus anyone doing it has to get a commercial license, a hack license, charge set fares, etc. etc.

I'd definitely welcome legislation legalizing those with even less regulation than Uber-type services get.

by David Alpert on Nov 5, 2012 4:28 pm • linkreport

By law, common carriers are not supposed to discriminate.

Definition:

An individual or business that advertises to the public that it is available for hire to transport people or property in exchange for a fee.

A common carrier is legally bound to carry all passengers or freight as long as there is enough space, the fee is paid, and no reasonable grounds to refuse to do so exist. A common carrier that unjustifiably refuses to carry a particular person or cargo may be sued for damages.

The states regulate common carriers engaged in business within their borders. When interstate or foreign transportation is involved, the federal government, by virtue of the Commerce Clause of the Constitution, regulates the activities of such carriers. A common carrier may establish reasonable regulations for the efficient operation and maintenance of its business.

Services like Uber want the benefits of being common carriers with few of the responsibilities.

by Richard Layman on Nov 5, 2012 5:41 pm • linkreport

Yeah I'm not sure how Uber thinks it should be able to get away with extra-judicially blocking people from using their public taxi service.

They could probably get away with it if they logged some sort of actual specific grievances against people (e.g. this person skips out on fares), but I doubt they could give customers star ratings or something that vague.

by MLD on Nov 5, 2012 5:59 pm • linkreport

Actually, I think that Uber wants to avoid being considered a common carrier, and be subject to various forms of regulations that are typically imposed on common carriers.

They want to be a contract/private carrier that can deal only with customers they choose without regulatory oversight by the taxi commission or others.

by ah on Nov 5, 2012 6:02 pm • linkreport

I should modify that to say "with more limited regulatory oversight" as presumably the usual types of safety inspections and insurance requirements applicable to limo companies would continue to apply.

by ah on Nov 5, 2012 6:03 pm • linkreport

Wow. Some common-sense regulations. Pass it and be done.

by Adam on Nov 5, 2012 8:02 pm • linkreport

"WP: I noticed your Twitter avatar is the cover of Ayn Rand’s “The Fountainhead.”

Kalanack [CEO OF UBER] : I don’t know what you’re talking about. [Laughs.] It’s less of a political statement. It’s just personally one of my favorite books. I’m a fan of architecture."

"“How would Ayn Rand react to the current policies and realities in the USA?”

One of the interesting stats I came across was that 50% of all California taxes are paid by 141,000 people (a state with 30mm inhabitants). This hit home as I had recently finished Atlas Shrugged. If 141,000 affluent people in CA went “on strike”, CA would be done for… another reason you can’t keep increasing taxes to pay for unaccountable gov’t programs that offer poor services."

http://pandodaily.com/2012/10/24/travis-shrugged/

http://pandodaily.com/2012/10/31/assholes-shrug/

by charlie on Nov 6, 2012 7:27 am • linkreport

One thing stuck out for me, and it seems to have concerning privacy implications: "Services will also have to give DCTC regular data dumps of where their various trips started and ended, their times, etc."

Even a person's home address associated with destination, date/time, etc is enough to identify a specific person, even if the name or other details are omitted. If I take a trip from home to the doctor's office or some other destination, should the government be informed of that by default? Should the public, as Alpert suggests, also have access to that data?

by Matt Ashburn on Nov 6, 2012 8:48 am • linkreport

Re: the rating of passengers: discrimination is already illegal by law. Having asked Uber drivers about the rating system, I've been told (on several occasions, by different drivers) that Uber's system exists to highlight customers who have recurring problems and that almost all passengers get a 5-star rating.

When I asked one driver what types of offenses would earn a demerit, he responded that it's only in the most severe cases and is used to highlight those who abuse the service. One recent instance he recalled was a group of rowdy passengers who berated him the entire trip, making it clear that he was to be subservient to them. At the conclusion of the trip, they threw a bunch of trash into the car and one said, "It's your car, and now you have to clean that up" while continuing to hurl insults at him.

If illegal discrimination is a concern for Council, I'd suggest cracking down on the cabs, which commonly discriminate based on race and location, among other factors. Cab discrimination was a common theme from several witnesses at the hearing.

by Matt Ashburn on Nov 6, 2012 9:00 am • linkreport

Couldn't the passenger rating system be modified so that it requires specific "wrongs" for given passengers? E.g., "no show", "beligerent", "left lots of trash"? Sure, it has the potential to discriminate still, but at least it's more concrete that simply stars, which could be reduced because the person wants service to a "bad" neighborhood.

by ah on Nov 6, 2012 9:28 am • linkreport

Of course taxi discrimination should be policed. The problem is that it is so easy for a driver to say X and get off being reprimanded. Almost 20 years ago, I got into a car accident with my bike and then tried to take a cab, and put my bike in the trunk. He refused to pick me up. I filed a complaint. He told the DCTC that he had stuff in the trunk and therefore couldn't have accommodated a bike. Bullshit, sure, but unchallengeable. Case closed.

This discussion reminds me now of the UPS vs. Fed Ex debacle. UPS has to follow the regulations of railroad-trucking industry, but FedEx is considered an airline, and is under different regulatory framework. So UPS advocates they be treated the same, as they believe that they have competitive disadvantages vis-a-vis FedEx. FedEx fights the campaign, calling it union-inspired, regulatory capture, etc.

But the reality, UPS is treated unfairly vis-a-vis FedEx.

Uber wants similar advantages.

by Richard Layman on Nov 6, 2012 11:12 am • linkreport

The driver/passenger rating system is a fantastic feature. I too have spoken to many drivers and they have told me that it allows them to register serious complaints against passengers, i.e. smoking in the vehicle, rowdy behavior, drinking, etc. It's a great way to ensure accountability on both sides.

by Justin on Nov 6, 2012 1:11 pm • linkreport

Is the rating system transparent? Can people see how drivers have rated them and why, and is there some way to challenge it?

by MLD on Nov 6, 2012 1:28 pm • linkreport

Cheh can't leave well enough alone, can she? What's the problem here? Why is regulation needed if people are happy? Must every aspect of life be regulated by a micromanaging Mary Cheh?

by Joe Flood on Nov 6, 2012 2:33 pm • linkreport

Joe Flood: As the law is written now, Uber is probably breaking the rules. Or at least they might have been, and the Council passed a temporary exemption to work it out. But they have to get it sorted out.

by David Alpert on Nov 6, 2012 2:35 pm • linkreport

Wow, I've normally been really opposed to just about everything the DCTC has been doing to stifle competition, but these are fairly elegantly drawn and a very good compromise. If this legislation offers protections and allows Uber to stay in business, I'm all for it.

by MetroDerp on Nov 6, 2012 3:27 pm • linkreport

To be honest, I don't see the reliability in Uber's rating system. Firstly, I don't understand why drivers are able to rate passengers. You don't walk into a supermarket and have the store personnel rate you on how you shop. And secondly, people tend to be bias depending on their experience; I can imagine that if a driver didn't talk and the passenger has mainly experienced talkative drivers, they are likely to give that driver a lower or bad rating...

by Harry Horsham on Nov 7, 2012 9:23 am • linkreport

You don't walk into a supermarket and have the store personnel rate you on how you shop.

Not every time, true, but if you're unruly and disruptive on a regular basis, or a known shoplifter, they'll definitely ban you from the store and/or put up your photo (just think about the number of bars that have done this).

I can imagine that if a driver didn't talk and the passenger has mainly experienced talkative drivers, they are likely to give that driver a lower or bad rating...

Well, first of all, that's a complete guess. I'd be just as likely to assume the opposite. Secondly, in addition to the rating button there is a comment field so you can specify what you're concerned about or pleased with, and if it's something as trivial as a silent driver, my guess is they'd just ignore it (and rate that passenger as an idiot). And third, if you leave the box blank and give ANY rating less than four stars, expect a call from Uber within an hour, very apologetically, asking what went wrong with the ride and what they can do to make it up to you. Now THAT is customer service.

by MetroDerp on Nov 8, 2012 11:52 am • linkreport

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