The D.C. Council is now considering how to regulate the popular Uber service. Taxi drivers say the car service is taking fares away from them without being regulated. Uber's owner claims that some DC Council members want too much regulation, which could put the company out of business. News4's Tom Sherwood reports.
Just moments before things started getting heated at today's D.C. Council hearing about sedan regulations, Ward 3 Councilmember Mary Cheh said to Uber CEO Travis Kalanick: "We are not in a fight with you. I'm not in a fight with you."
Oh, but they were, Kalanick immediately made clear. For the CEO of the app-based sedan hailing service, any attempts to regulate the company meant Cheh was fighting with him.
Cheh and Kalanick had a brief verbal volley today over an incident from the summer -- when Cheh said she met with and agreed upon new regulations with Uber's D.C. office. The LA-based Kalanick swept into town and said they never had a deal, then proceeded to start an email and Twitter campaign with help from well-connected customers.
At the time, Cheh was taken aback, and in the time since, several councilmembers have told News4's Tom Sherwood that Kalanick's "arrogance" is hurting his case. Cheh, clearly shocked by the change in attitude from the company (which Kalanick denied again today), tabled her proposed regulations and suggested the Council take up the issue again in September.
It's now September. And perhaps sensing a swift decline in decorum (and being over on her time), Cheh backed down from the battle of words with Kalanick and let Ward 4 Councilmember Muriel Bowser take over the line of questioning.
Despite the unpleasantness, after hours of testimony and questions, at least one thing had become clear as crystal: Despite Kalanick's objection to persecution, the D.C. Council isn't interested in getting rid of the company. In fact, it seems to be trying to lay the groundwork for other competitors like Hailo to enter the scene with fewer growing pains.
The same cannot be said for the D.C. Taxicab Commission, which recently proposed a set of regulations that Kalanick and Uber-advocates have said would kill the service. But as Cheh and Bowser both pointed out, DCTC proposed regulations aren't law.
Bowser praised the service, and Ward 1 Councilmember Jim Graham noted that Uber has plenty of happy customers -- and no one on the Council seems interested in interrupting that relationship.
"The rhetoric about the regs being designed to put other companies out of business are a bit over the top," Cheh told Kalanick. And when she eventually engaged him again, this time with fewer fireworks, she kept drawing the conversation back to what she had determined was the central question: Just how should the Council regulate hail-by-app sedans?
Two big issues for the Council appear to be Uber's price floor (Cheh wanted to set one, Uber objected) and the so-called "surge pricing," which is when prices increase during busier times (Cheh calls it "price gouging," Uber says it's supply-and-demand). In many cases, Uber does not offer estimated rates -- leaving customers to do arithmetic in their heads or possibly face a surprise when they arrive at their destinations.
"Should there be no regulation of your surges?" Cheh asked Kalanick.
"I think the customer needs to have the information about the surge," he said. "They need to have that level of transparency. If you don't provide that level of transparency, customers, they're going to puke on that anyway." Kalanick said that the next generation of the app will have a better estimated price for its customers.
But he rejected the price gouging charge: "Talk to the hotel industry," he said, gesturing at Solomon Keene, president of the Hotel Association of Washington, D.C. "They charge different prices when it's busy."
Keene also quickly denied price-gouging, calling dynamic pricing simple supply-and-demand.
Graham -- who also got a bit testy with a defiant Kalanick -- objected to the analogy, saying that recently taxi modernization regulations meant the local taxi industry "has its hands and feet tied" while Uber is "unbridled."
While that seemed a bit like an argument for regulation for regulation's sake, Graham eventually asked Kalanick, point blank, if Uber would stay in D.C. if the Council, against Uber's objections, set prices for the company.
"If we can run a business, yes. If we don't think we can run a business, then no," Kalanick said.
New regulations are certainly coming for Uber -- but based on the Council's repeated mentions of constituents who love the service today and in previous hearings, it seems unlikely at this point that any laws will damage the business irreparably.
"I don't think there's going to be an obstacle to the full flourishing of [services like Uber]," Cheh said. "We shouldn't be putting in place [DCTC regulations] unless we can justify them."
And at about four hours into the hearing, she seemed to want to wrap Kalanick's panel with a more conciliatory tone: "I want to send you away feeling optimistic."