DC Dumps Bill To Force Uber Into High Prices; Complains That The Bill Was To Help Uber

from the regulatory-capture dept

Earlier today, we wrote about the city of Washington DC working on a a bill that would require startup car service Uber to charge five times as much as a cab, arguing that they need to regulate what is considered a “premium class.” They don’t explain why one needs to regulate what’s premium and what’s not, but that’s what you get in a massively regulated/anti-competitive market. The public outcry over this regulation, however, has resulted in the Councilmember who wrote the amendment, Mary Cheh, backing down and shelving it.

As we noted in our earlier post, Cheh had said all along that the amendment was actually an attempt to legalize Uber, after a Taxicab Commission “sting” earlier this year, which claimed that Uber was acting illegally. In response to all of this, Cheh seems upset, since she says that she worked with Uber to create the amendment, and was blindsided by the criticism:

“Several months ago, Uber contacted me and asked to work together to legalize services like Uber in the District… Since then, I have met with Uber many times, negotiated in good faith, and believed that I had reached an agreement with them last week.”

Others have suggested that parts of the amendment could be acceptable if they remove the minimum pricing rules. Uber, for its part, claims that it’s always believed the service was legal in DC, so it never believed that the amendment was needed to “make it legal.” For what it’s worth Uber clearly has benefited from this fight, as it drew an awful lot of publicity to the company’s presence in DC (and elsewhere). Either way, it seems difficult to see how regulating a high price benefits Uber.

And, in the end, what you’re left with are questions about why taxi licensing needs to be so restrictive and so all-encompassing. Are there concerns about keeping passengers from being ripped off and keeping them safe? Sure, but there seem to be ways to deal with that which don’t involve entirely regulating every aspect of the market, limiting competition and setting the actual pricing. But, in the end, as we’ve seen in other markets, those in regulated markets tend to figure out ways to use the regulations to their own advantage…

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Companies: uber

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Comments on “DC Dumps Bill To Force Uber Into High Prices; Complains That The Bill Was To Help Uber”

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Chosen Reject (profile) says:

Re: Concerns about being ripped off?

But I have to be charged 5 times the going rate at least (don’t forget that it’s a minimum) in order for me to be protected. It’s what the friendly DC council members told me. They also showed a lot of concern about what might happen if I didn’t buy that protection. So friendly and concerned, how could I not believe them?

Anonymous Coward says:

Is Mary Cheh Lying?

Mary Cheh made a number of exculpatory statements. The question is, are those statements accurate? Can someone authoritative from Uber please comment:

“Several months ago, Uber contacted me and asked to work together to legalize services like Uber in the District…”

So, did anybody high up in Uber actually contact her several months ago? Who? When, exactly? Was it the understanding by Uber that she was being asked to work to legalize the service? Does Uber agree that the service needs legalizing?

“Since then, I have met with Uber many times”

Can we have a list of who she met when?

“negotiated in good faith”

Does Uber believe she was negotiating in good faith?

“and believed that I had reached an agreement with them last week.”

So, is there a signed memorandum of understanding? If not, why not? Can the memorandum be made public?

Zangetsu (profile) says:

CNN hit the mark .. sort of

In a recent news story on CNN, they commented on Uber and it’s entrance into the DC marketplace. The comment that struck me as being astute was when the reporter asked the question “Should consumers be forced to pay a price so that the earnings of some workers won’t be affected?” While the answer in the Uber case was “no”, the question is applicable to technology in general.

The MPAA thinks the answer should be “yes”. The RIAA likewise. Like the taxi industry in Washington DC, there is an expectation that the introduction of new technologies should be done in such a way as to cushion the impact of that technology upon their pay cheque. Therein lies the problem that the 21st century needs to deal with: how to get people to move to a new job. Perhaps the education system needs to change so that people can get trainer cheaper, faster and on demand. Perhaps the funding of education from a municipal/state/federal level needs to be altered to pay for results instead of attendance.

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